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Feedstuffs is the news source for animal agriculture
July 25, 2020
It's critical that we retain the ability to feed ourselves, of course, and some form of government support is necessary. But at what cost? How much tax money should be spent to ensure our farms and ranches remain viable? POLITICO reported President Trump was "already spending double his predecessor to spare farmers the cost of his trade war. Now the price is reaching unsustainable levels."
How much is he spending? "Direct farm aid has climbed each year of Trump's presidency, from $11.5 billion in 2017 to more than $32 billion this year - an all-time high - with potentially far more funding still to come in 2020, amounting to about two-thirds of the cost of the entire Department of Housing & Urban Development and more than the Agriculture Department's $24 billion discretionary budget," according to a POLITICO analysis.
But lawmakers are taking a mostly hands-off approach when it comes to oversight, letting the U.S. Department of Agriculture decide who gets the money and how much. Basically, that is $32 billion with no checks and balances? No way of knowing how the money was spent? Would the ag community allow that kind of increased government support in any other area without screaming about the rise of socialism? Oh, hell, no!
Let's face it. Any government largess is a form of socialism. Using tax money to support “the common good,” whether it be fire or police services, SNAP, commodity pricing, roads, or any other form of federal assistance is socialism. Wikipedia defines it as "Any federal program, project, service or activity provided by the federal government that directly assists domestic governments, organizations or individuals in the areas of education, health, public safety, public welfare, and public works, among others."
And so cash-strapped farmers have had to accept a historic surge of high dollar checks from Uncle Sam in the past three years, mostly to stem the huge financial losses created by Trump's tariff fights and the coronavirus pandemic.
It has always been politics that shape agriculture beginning as far back as 1799 when George Washington created the National Agriculture Board. Today, the government-developed farm bill directs the choice of crops to plant and animals to raise. It also controls transportation and commodity selling prices. Its financial backing determines the restrictions placed on agricultural development and any economic assistance that farmers receive.
USDA is the Siren of ancient Greek mythology, which used its sweet voice to lure sailors to rocky shores, against which the sailors' ships were smashed. It's a seductive sound, but it's an almost Mafia-like boss of bosses, the monster on the Midway, the Colassus astride Rhodes that dominates the near- and far-horizon. With its massive checkbook and manpower, it will always define American agriculture.
But as government's control of agriculture grows more powerful and farmers and ranchers increase their reliance on unprecedented taxpayer support, its tenuous hold on its independence erodes. Is it in danger of becoming nothing more than subsidized farming, reliant on Washington for its survival? Uncle Sam has always extended a financial helping hand but currently, with almost no strings attached and blinded oversight from Congress, it's becoming an attractive nuisance like the neighbor's unfenced swimming pool.
Those massive and rapidly growing payments have been a political boon to Trump's popularity. He's tweeted that he hopes the money would be "the thing they will most remember" (Especially come November?). It risks creating a culture of dependency, though. Subsidies become part of a farm's financial plan and are the “seed” money for next year.
"It's really difficult once you're giving farmers this much money to then take away those (payments)," Anne Schechinger, senior economics analyst at the Environmental Working Group, a nonprofit watchdog organization, warned Politico, "It's a big problem for agriculture because it's not sustainable."
Bailing out agriculture for international trade shortfalls began in 2017 and now sits at $23 plus billion. It's an unappropriated payment funneled through USDA's Commodity Credit Corporation (CCC). CCC had to borrow the money from an over-extended U.S. Treasury in an attempt to stabilize a shaky farm economy that had been in decline for more than seven years. It was a tenuous concept pre-COVID 19, made even more tenuous today.
Under the eight years of the Obama Administration, payments to farmers jumped almost 50%, reaching nearly $13 billion per year. The Trump Administration has more than doubled that in just three years. A rare bipartisan agreement could add $50 billion to USDA's bank account as part of the next stimulus package to help future agricultural prospects damaged by falling commodity prices and supply chain disruptions.
Passing billions of dollars of support to ensure American agriculture remains financially viable, though, is not a sustainable way forward. Almost every farmer or rancher I've talked with and every ag news story I've read repeats the same message: "We don't want government help; we want to compete fairly in the global market."
Bottom line: An occasional helping hand is fine, but care must be taken to ensure that the industry can remain competitive when that hand is withdrawn as it inevitably must. Fair warning came from Politico's reporting on the Food & Agricultural Policy Research Institute's just released baseline estimates for the coming year. FAPRI says government farm payments could fall by almost half next year, from near $33 billion to $16.6 billion. The choice is simple: independence or dependence.
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