Freedom to Farm Act Backfires

January 3, 2002

In 1996, President Clinton signed into law a bill that was supposed to end 60 years of farm subsidies. Critics now complain it's done just the opposite.

In fact, the Freedom to Farm Act is now sending farmers more subsidies than ever before.

  • The act was passed in 1996, when high commodity prices drove farm income to a record $55 billion -- seemingly indicating it was safe for the government to get out of agriculture.
  • But in 1997 commodity prices dropped, Congress got back in to act, and by 2000 subsidies provided farmers 49 percent of their net income -- and government payments last year soared to a record $23 billion.
  • Subsides since 1996 total $92 billion, triple the sum authorized in 1996 to ease the transition to the free market.
  • Since enactment of Freedom to Farm, subsides have provided 32 percent of farmers' income.

Analysts say we're stuck with subsidies for years to come, because subsidies are an important factor in buying and selling farmland. Also, farmers cannot raise slumping commodity prices because there are so many of them, and they have no mechanism for reducing production.

Source: Thomas A. Fogarty, "Freedom to Farm? Not Likely," USA Today, January 3, 2002.

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http://www.usatoday.com/money/bcovthu.htm

 

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