I can't link the Wall Street Journal article but if you have access check out The No Farmer Left Behind Act article from November 14. While produce prices are on the rise as well as the profit of those who produce it, Congress is working on another farm bill that will dole out $25 billion in direct crop payments and $10 billion in emergency assistance. The impact of subsidies can be illustrated by these quotes from the article:

In other industries, we celebrate the impact of trade and technology in reducing prices. But U.S. farm programs are expressly designed to make food prices higher for consumers. Economists estimate that Americans pay about $12 billion more a year for food as a consequence -- on top of the higher taxes to sustain the direct handouts...

About $4 of every $5 in the Senate bill go straight into the pockets of the growers of five commercial crops: corn, cotton, rice, soybeans and wheat. The idea of subsidizing corn growers at today's prices makes about as much sense as government sending a check to every American who owns Google stock.

Now, immediately upon coming across this article I though about how the big benefactors of farm subsidies are the corporate farmers.

And though this is a Democratic Congress that claims to care about "inequality," the USDA says about two-thirds of this farm aid goes to the wealthiest 10% of farms. It is a direct transfer from taxpayers and poor consumers to mostly rich corporate farmers. President Bush has requested that subsidies only go to farmers with incomes below $200,000, but the Senate bill has no income caps for full-time farmers. One proposed amendment (by Minnesota Democrat Amy Klobuchar) would establish a cap of $750,000 in income, but that's still about 14 times the average family income in America, and the farm lobby is fighting even that. The House subsidy ceiling is $1 million a year, which after fancy accounting would exclude no corporate farms at all. Yet all of this is defended as a "safety net."

It would thus seem that the farm aid is going to the wrong farmers. The American consumer has enough to worry about with increasing fuel and energy costs without having to deal with spiking agriculture product prices that may be increasing in cost partly due to farm subsidies. It is just another burden placed on produce prices in addition to increased demand and increased production costs.

This entry was posted by Titus Todd, on Wednesday, November 14, 2007. You can leave your response.