Farm Bill Critics

I have mentioned the Farm Bill a couple of times and even mentioned that it is designed to help the rural areas of the US. Whether it actually does this or not I don't know, but that is the purpose. In all fairness I should post a critics point of view.<br />n<br />n<a href="http://online.wsj.com/article/SB119500379205092116.html?mod=googlenews_wsj">The No Farmer Left Behind Act</a><br />n<br />n<blockquote>Perhaps it's beneath the dignity of Members of Congress to shop at a grocery store, but if they did they'd know that food prices are rising faster than at anytime in 17 years. Milk now costs $3 a gallon in many states. Eggs, oranges, peas, tomatoes and rice are selling at or near all-time highs. The biggest winners have been corn producers, as corn prices have doubled in two years — thanks in part to new mandates for ethanol.<br />n<br />nAll of this is translating into the best gains in farm wealth in decades. Total farm income is expected to leap by 44% to $73 billion this year, according to the <acronym title="United States Department of Agriculture, Bought and Paid for by The Big Meat Packers">USDA</acronym>. The average income of full-time farmers hit $81,420 last year, with large corporate farms earning in the millions of dollars. Meanwhile, farmland prices in the past five years have increased by $200 billion a year, or an average asset gain of $100,000 per year per full-time farmer.<br />n<br />nAnd yet Congress is writing another five-year farm bill as if this were 1936 and the Okies roamed the plains. The House has already passed a $286 billion bill, and the $291 billion version now moving through the Senate may be the largest feast of subsidies ever served up by Congress. The bill's estimated $25 billion in direct crop payments, and another $10 billion in "emergency assistance" and insurance subsidies, are stacked as high as an Iowa silo.</blockquote><br />n<br />nA couple of things. Farmers aren't supposed to make money? These passages make it sound like they are opposed to farmers making money. I will also point out that they state farm income is expected to rise 44%. The question is, are we taking net or gross income? I'll guarantee they are taking gross income. How much profit is there in that $73 billion? That I can't say but it ain't $73 billion. Haven't farmers lost enough money over the years that they deserve to make some, not a lot, of money on a rare occasion?<br />n<br />nHow much of this 44% rise in farm income is going towards higher prices for farm inputs? Fuel, fertilizer and every other conceivable input to crops is up this year significantly so this rise in price is not going in the farmers pocket. It goes out to pay someone else for things.<br />n<br />nA 44% rise in income might sound like a lot of money and it is but don't make the mistake of thinking the farmer is pocketing this money. He's not. It is going to pay bills and keep the place in operation raising food to feed the US and the world.<br />n<br />nGrocery story prices are rising. I can't argue with that. But is all the price rise you and I are seeing in the grocery store going into the farmers pocket? The article would make you think so but I will guarantee you, it's not. There are a lot of middle men who are capturing a lot of that price rise. The farmers are probably getting the smallest amount of that price rise of anybody in the supply chain.<br />n<br />nHow long is this bull market in commodities going to last? How long will these higher prices help the farmers? I personally think longer than we are used to seeing. The rising income levels in countries like China and India is driving prices up for commodities world wide and I really don't see this trend ending anytime soon. Who knows though, prices could drop again hurting farmers.<br />n<br />nThe arguments used against the Farm bill in this article while true are misleading. Now I will be the first to admit I don't understand the Farm bill as well as I maybe should but I don't buy the arguments used here. This would lead you to believe all the money in the Bill goes to farmers and it doesn't. Food stamps, school lunch programs, rural development are all part of it so it encompasses a lot more than just farmers. There is a lot more here than meets the eyes. Way more than the critic in the article is willing to admit to. <br />n<br />nWe will see what happens. Right now in the Senate the whole Farm Bill is stalled out. Everybody and their pet interest is trying to get amendments tacked on to it for everything in the world besides farming. Iraqi war, foreign aid, fuel economy standards, you name it, the amendment is being proposed. Once this gets beat back you might see the Senate start to debate the issue, then we will see.<br />n<br />n<strong>The most important political office is that of the private citizen. Louis D. Brandeis</strong>