NCPA - National Center for Policy Analysis

Cost Of Abandoning Crop Subsidy Reforms: $173.5 Billion (and Counting)

May 3, 2002

The Wall Street Journal has called the farm bill "a 10-year, $173.5 billion bucket of slop." Many other editorialists and critics were even less charitable.

If it passes as expected, only President Bush could save the country from this 70 percent increase in spending on agriculture. But he is reported to be ready to sign the bill -- without any fanfare if he is wise, critics warn.

They say the bill is chock full of disasters:

  • Subsidy rates for some commodity crops will jump by some 10 percent this year alone.
  • Conferees ladled out $94 million for an apple program, $500 million for sugar supports, and $4 billion to subsidize peanuts -- all of which are in more than ample supply and don't need taxpayer encouragement.
  • New programs were created for dried peas and lentils -- and dead programs for wool, mohair and honey were resurrected.
  • The bulk of the bill's new subsidies will go to a select group of wealthy wheat, rice, corn, cotton and soybean growers.

The one positive measure in the Senate bill -- a cap of $275,000 on the amount of subsidies per farm per year -- was killed in conference. The cap goes up to $360,000, and corporate farmers were handed tools to circumvent even that limit.

Finally, the bill is a disaster for trade policy. Only last year, the U.S. convinced Europeans to put their bloated farm subsidies on the table in global trade talks. But as the European Union's Trade Commissioner, Pascal Lamy, recently noted, the U.S. now pays three times more per farm than does the EU. This is a farm-subsidy bill, the Journal points out, that would embarrass even the French.

Source: Editorial, "The Farm State Pig-Out," Wall Street Journal, May 2, 2002.


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