Cover Story

Farm reform fumble

Issue: "Mid-term, mid-field pileup," Dec. 11, 1999

If Republicans in Congress have been playing a ball-control style of offense this year (see main story), then they were thrown for a loss, and perhaps even fumbled, on at least one play: agriculture reform.

One of the GOP's most noteworthy achievements since gaining control of Congress in 1995 is the Freedom to Farm Act of 1996. Under this law, Washington ended federal restraints on what and how much farmers could produce and pledged to phase out, over several years, price supports for many commodities.

This was great news for taxpayers and for anyone who buys food, especially poor people. Poor families must spend a higher proportion of their incomes on food than do the affluent, so price supports, which keep food prices artificially high, hurt them the most. The reform was an immediate success: As acreage was opened up for production, prices for corn, wheat, soybeans, and other commodities dropped as much as 60 percent.

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But Congress wasn't prepared for an inevitable side effect of any market-oriented reform: In order for free markets to bring about their many blessings, businesses must be allowed to go under. And since Freedom to Farm passed, the press has run story after heart-wrenching story about families that have farmed for generations but, because of low prices, are on the brink of losing their way of life.

So over the past two years, Washington put an effective halt to market-oriented farm reform. For its part, Congress showered farmers with tens of billions in emergency aid, renewed a generous dairy price-support program that adds about 20 cents to the price of a gallon of milk, and slowed the phase-out of other price supports. President Clinton went even further, calling for the return of a permanent federal "safety net" for farmers.

Many farm families' stories are sad, but what about people in inner cities trying to get off welfare, working hard, and keeping track of every penny? Artificially high commodity prices cause them direct harm. And most of the subsidies don't go to small farmers, anyway. "About 1 percent of the largest farm corporations command about 50 percent of the market-and receive the lion's share of the government's largess," writes Stephen Moore, an economist at the Washington-based Cato Institute, in The Weekly Standard. He also points out that most "family farmers" are not full-time farmers and receive most of their income from other jobs.

It would be wonderful to maintain the farming way of life for those who need subsidies, but is it fair to accomplish that on the backs of taxpayers and poor people? The answer from Washington over the past two years seems to be yes.

Timothy Lamer
Timothy Lamer

Tim is managing editor of WORLD magazine.

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