[And we think of ourselves as comparatively abstemious when it comes to farm subsidies. The Chinese better not try anything like this at home.]
US subsidy bill for farms nearly as high as net income
Financial Times, Mar 15, 2001
By NANCY DUNNE
US farm lobbyists are pushing for billions of dollars in "emergency" payments - on top of existing subsidies - over the next 10 years, although the federal government is already paying many farmers more than they are earning from commodity sales.
The US Agriculture Department has estimated that net farm income may decline from Dollars 45.4bn (Pounds 31bn) last year to Dollars 35.6bn in 2002.
Government payments - including regular subsidies and emergency aid - to farmers this year are expected to hit Dollars 32bn, and they could rise further next year, according to department officials.
Buffeted by low commodity prices, a coalition of 20 farmer organisations -
ranging across the political spectrum - are pleading for Dollars 9bn- Dollars 12bn in additional aid each year for the next decade. A letter sent by the coalition to the congressional budget committees urges a swift response.
"Delaying this work only harms those producers who are unable to obtain production financing without at least some signal that Congress will approve additional assistance," it said.
The letter comes as the administration asks industries to hold back special requests that might appear to bust the budget until the president's Dollars 1,600bn-plus tax-cut package wins approval.
So far, President George W. Bush has not requested new farm spending, but his agriculture secretary, Ann Veneman, said she would work with Congress to provide "an adequate safety net".
However, farmers - despite their declining numbers - retain strong political clout in Washington.
It has been five years since passage of the Freedom to Farm Act, which was supposed to wean farmers off their "subsidy addiction". The act eliminated an earlier land set-aside programme to discourage all-out planting. Output soared and prices fell. Surpluses elsewhere in the world and the Asian financial crisis also depressed export demand.
Meanwhile, farmer payments are going more than ever to larger family and corporate farms.
Clark Williams-Derry of the environmental working group, a research and advocacy organisation, said the top 10 per cent of recipients - 144,000 farmers and farm businesses - collected 61 per cent of the 1996-98 subsidies. They received even more for disaster and conservation spending.
Copyright: The Financial Times Limited