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<A HREF="http://www.zolatimes.com/V3.7/pageone.html">Laissez Faire City Times
- Volume 3 Issue 7</A>
The Laissez Faire City
February 15, 1999 - Volume 3, Issue 7
Editor & Chief: Emile Zola
-----
The Spectacle of Socialized Farming

by Michael R. Allen


In its 1936 ruling on United States vs. Butler, the Supreme Court
declared that farm subsidies and price controls were unconstitutional.
"The regulation is not in fact voluntary," began the majority opinion.
In the argument, it was established that farmers were being forced to
participate in federal administration of farm programs.
After its initial proposal was rejected, the New Deal Congress drafted
another (nearly identical) program to fetter agricultural concerns to
governmental control. Under tremendous political pressure to "save" the
poor farmers, the Court decided to flip-flop and ruled that the farm
programs were legal under the premise that they constituted "regulation
of interstate commerce," as the proponents asserted. The latter case,
Wickard vs. Filburn (1942), had this outcome because of the rising tide
of New Deal socialism.

The Court at that time had defeated much of President Franklin
Roosevelt's agenda, and it probably was correct to do so. However, the
nation was yearning for quick-fix New Deal solutions. Thus, the Supreme
Court justices reversed their previous stands for political reasons. It
should be noted that, prior to the extreme interventionism of Roosevelt
and the more subtle controls of Herbert Hoover, President Calvin
Coolidge had twice vetoed bills that would pay farmers for their
surpluses. "Farmers have never made money. I don't believe we can do
much about it," Coolidge dryly noted.

Unfortunately, the self-serving political actions of the Supreme Court
led to a monstrosity that thwarts natural change. Of course, it is
highly possible that had the Court ruled differently in 1942, another
Court in the future would have upheld similar legislation. The fact
remains, however, that farm subsidization is a troubling premise that
leaves few choices for anyone involved in the program. Just as with many
other socialized programs, the farm program leaves only two
alternatives: eradication or total continuance. The subsidies have
fostered such dependency that their halt would leave the farm community
in turmoil. While subsidies are totally fraudulent in constitutional
terms, it might be necessary to gradually alleviate government controls,
much in the manner of the 1995 Farm Bill.

The Farm Bill did not affect the peanut, tobacco, sugar, or cotton
subsidies, which are as much money-makers as any other program. Many
farmers have gained vast fortunes through the government subsidies that
continue to pay farmers for land that is not planted. Senators in states
like Iowa, Mississippi, and Kansas commit political suicide if they are
too "severe" in the eyes of their rural constituents. Most of the
influence comes from agri-businesses like Archer-Daniels-Midland.
Neither Democrats nor Republicans are shortchanged, as both parties are
equally likely to support subsidies.

During the 1993 floods, ludicrous crop insurance programs reached a new
level of oddity: thousands of acres of farm lands, already lying in
areas determined to be flood plains, were destroyed and paid for with
millions of tax dollars. Where is the justice for other American
workers? When sales in the watch-making business are slower than usual,
does Uncle Sam pay Timex for the difference between sales in year X and
year Y? Of course not, but that would be too obvious. Big business is
ever so artful about cloaking its Federal loot.

The farm subsidy program stems from the belief that we are a nation of
farmers. This antiquated notion has been factually disproved, yet the
government still acts as if there is a need in 1999 for 1899 production
levels. This, in turn, creates huge surpluses and enslaves the farmer. A
small farmer finds it impossible to enter a system that does not operate
on a free-market basis.

The solution lies in a choice between the free market and neo-socialism.
America must move forward and allow the market to reclaim agriculture.
The benefits are myriad: lower prices, improved technology, increased
entrepreneurial spirit, but --most importantly -- the individual rights
of farmers would be restored.

Has anyone in government ever realized that a 1999 economy does not need
the same amount of farming activity as did a 1936 economy? In sixty
years, technology has increased rapidly and farming is no longer a way
of life for America. It is no longer true that 1/3 of Americans are
farmers, so it is blatantly obvious that society has changed. Now, it is
time for government to move forward as well.

If a Democratic administration unwisely began the farm programs, then a
Republican President's staff totally mismanaged the entire program. At
the beginning of Ronald Reagan's first term in 1981, farmers received a
total of $9.8 billion in aid. By 1986, the farm aid programs totaled a
massive $29.6 billion. By comparison, Aid to Families With Dependent
Children (AFDC) received only one-third of the $20 billion increase farm
subsidies received.

Near the end of the Reagan administration, the President signed a bill
that created the Federal Agricultural Mortgage Corporation, which gave
farmers loans of up to 80 percent of their total farm value. The cap on
farm value was a stark $2.5 million, meaning that a farmer could receive
a government-insured loan of up to $2 million. The farm credit system,
which holds more than half of all farm debt, forgave $9 billion worth of
farm debt in mid-1988. Incidentally, then-Vice President George Bush won
the Midwest handily on the day of the General Election. Is it little
wonder that farmers are, as David Frum wrote, "the staunchest Republican
voters this side of Park Avenue"?

Recently, Rep. Bill Archer (R-Texas) proposed eliminating the ethanol
subsidy by 2000. His call led to protests from members of his party and
from corn farmers. Once again, Archer-Daniels-Midland (the largest
ethanol supplier) was leading the charge to preserve the benefits not
afforded to other industries. (See below.)

The market sets the number of tailors, doctors, and lawyers by keeping
up with demand and eliminating the unnecessary jobs and services. There
is no reason why farming should not be completely absorbed into the
American marketplace.

Supporters' Absurdity

Since the days of the New Deal, the federal government has chosen to be
agriculture's primary patron. Through a barrage of price supports, loan
programs, and direct cash subsidies, the Department of Agriculture has
catered to every farmer or businessman owning a parcel of land. At the
same time, other industries have developed and thrived independently
from Big Brother and his payload of goodies. In 2002, soybean, wheat,
rice, corn, cotton, and all other grain subsidies and controls might
expire (although recent disaster relief laws may keep them going).
However, certain privileged spheres of farm life are vigorously trying
to make sure that they remained privileged. Tobacco farmers, sugar
farmers, and peanut farmers have all found enough bipartisan sponsors to
 defeat any measure that would ensure even modest adjustments to their
programs. Another subsidized group whined loudly this week. Startled
observers, including this writer, learned that there is a subsidy so
ridiculous that one might have not have believed in its existence: the
ethanol subsidy!

This is no small potato. Okay, it is to Uncle Sam and Senator Pete
Domenici, but to us laymen payment of a $600 million annual subsidy
represents a staggering misuse of funds. Budget hacks and supporters of
the subsidy have adroitly hidden its presence for years, as no one has
tried to cut this entitlement before. However, it was revealed when
House Ways and Means Chairman Archer announced that he is designing
legislation to kill the monster by the year 2000, with an extended
removal plan. Corn growers who likely supported the reform of welfare
balk at the thought of losing their own unlawful incomes.

"If it went away, it would be a detriment to this country," said Vic
Riddle, a corn grower from Illinois in 1997.

The corn growers have now appointed a flack in the House. Representative
John Shimkus (R-Illinois), whose other innovative ideas include banning
flag-burning, is adamant in his dogmatic support for farm welfare: "Our
family farmers worry enough about how the elements and other outside
factors will affect their crops." So do us flower growers, but we don't
get a subsidy for wilted petunias and trampled acidanthera. Shimkus's
argument is a classically facetious defense of the unprotectable. In
essence, he is saying that the weather's unpredictability makes farming
different and in need of help. Window-washing, baseball games,
street-sweeping, building-construction, road- and sidewalk-laying, and
the performance of music are just some of the many activities dependent
on good weather which have no direct subsidy. The Illinois Republican is
perhaps swayed by the fact that his state produces more ethanol than any
other.

Also his defense may stem from another fact: the GOP-friendly
Archer-Daniels-Midland Company located in Decatur, Illinois processes
seventy percent of all ethanol. As to ethanol's superiority, I have yet
to see an ethanol commercial, nor have I put one drop of ethanol into
any car that I have attended.

Why do we subsidize farms? According to Riddle, Shimkus, and many
others, it's because the farmers can't count on the weather and need
assistance. According to the rest of us, it's just another case of that
contagious and vile plague known as government absurdity.



------------------------------------------------------------------------


Michael R. Allen is the editor and publisher of SpinTech Magazine. His
regular column is "Strange Disposed Times."

-30-

from The Laissez Faire City Times, Vol 3, No 7, Feb. 15, 1999
------------------------------------------------------------------------
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