Every five years or so in America, there is a traditional re-examination of the Government's policy towards the nation's farmers, including the massive program of entitlements and market manipulations collectively known as the Farm Bill.
The most recent Farm Bill included the usual bit of farm subsidies to growers of various sundry crops-- corn, soybeans, wheat, etc. The politicians take advantage of the occasion to trumpet their concern for those "poor family farmers" in America-- you know, the ones who are scraping to get by and who NEED all this government handout financed by the increasingly generous American taxpayers. So, we taxpayers write checks to farmers and pay them to NOT grow certain products-- in theory to ensure the price of a given commodity crop will be high enough to sustain on honest living for those poor family farmers, and "ensure food security" for all of us. Or at least, this is the sales pitch broadcast loudly and broadly to the American people.
But the truth is quite different than that. In the recent edition of The Economist, it was noted that the average American farmer's net income is one third higher than the income of the average American non-farmer. Where then are the struggling family farms who deserve such massive flows of government largesse?
But even more aggregious is the fact that the overwhelming majority of the Farm Bill money doesn't even go to the "struggling" family farmers. The majority of it is a gift-wrapped handout to massive agribusinesses like ConAgra Foods and Archer Daniels Midland. Other recipient are similarly less deserving-- hobby farmers like Ted Turner and Sam Donaldson also benefit handsomely from the government financing their particular fondness for the rural vacation.
As if this kind of government intervention into the food market was not yet foolhardy enough, the Gov't has generously mandated the adoption of Ethanol as a fuel additive in many locales-- a move no doubt cheered by the big corn-producing agribusinesses who already have money coming out their ears (if you'll pardon a pun).
So the government mandates something that will drastically increase the demand for corn, which is the primary source for ethanol production. As you may remember from Economics 101, this increase in demand has raised the price for Corn.
But because farmers can choose which crops to grow and will understandably act in their own interest and plant the crop that will make them the most money, we have now seen more corn planted where soy beans or other farm commodities were once planted. The net result is that the price of all crops goes up because of supply shortfalls.
You can see this everywhere you look at your local grocer; bread, milk, eggs, and many vegetables are substantially more expensive than at any point in recent history.
Thus the combined effect of the Farm Bill and the ethanol mandate is that we taxpayers are paying Billions of dollars a year to make our own food more expensive and our cars less efficient.
Now, this alone should suffice to anger you. But to illustrate just how absurd is this policy, let's change the names of the actors and keep the principle the same.
Imagine that tomorrow a member of Congress introduces the Gasoline Bill. Like food security, fuel security is absolutely essential to our modern lives. As we cannot live without food, we cannot live without gas. Because it is so important to our lives, we MUST safeguard the producers of the product. Thus, the Gasoline Bill, which proposes to pay oil companies in America billions of dollars a year to NOT refine oil into the products we need. This will ensure that the price of gasoline goes up to the $5/gallon mark essential to the prosperity of the small family oil company.
How would you feel about billions of your tax dollars being used to make gasoline more expensive for you? Now, my little parallel isn't perfect-- but far more appropriate than one might think since both are commodities for which there is a global market.
The history of governments big and small intervening in free markets is one full of case studies where a great number of people paid a price to enrich a much smaller and more powerful few.
--Abby's Dad
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