Saturday, June 11, 2005

The Sweet Smell of Subsidy Farming

"We don’t feel like we’re cutting a fat hog here,” said sugar-beet farmer Steve Martineau from his 900 acre Idaho spread near the Snake River.


Maybe not, but sugar-beet farmers like Martineau produce the raw materials for the world’s most expensive sugar.  Our government agricultural subsidy programs overprice American sugar by three times the world price and stuck consumers (in 1998) for just under $2 billion at the dinner table.  So it might not feel like cutting a fat hog, but that’s the main problem with subsidies; they don’t really help farmers, who get used to the income and are seduced away from growing profitable alternatives the markets need and the land will support.


Essentially, as a consumer you’re opening your wallet to Steve and his son, accepting an outrageous price for a common commodity and at the same time wrecking the livelihood of Central American cane growers.  That doesn’t seem like much of a bargain when Steve and his son could as easily rotate cabbage, mint, pumpkins, squash, and grass seed crops, all of which are easier on the land and grow well in Idaho. 


Farming has changed more than any other area of American production in the past hundred years and the surprising thing is that farm families who are doing the best are those who have been denied subsidy crops for one reason or another.  They innovate instead of savaging their land with a single cash crop.  They find new specialty markets where there’s profit instead of control.  The Idaho State Department of Agriculture has a number of such programs going.  They mostly are aimed at smaller acreages, but farms such as Steve Martineau’s could make such a shift by putting six or seven hundred acres in barley or hay crops and the balance in specialty crops. His payroll would rise, but so would acre/income and the added agricultural jobs would be a boon to the Idaho economy.


It’s not my intention to preach to Idaho sugar beet growers.  My opinion is directed at the damage all subsidy crop farming does to innovation.  Most of it is lobbied by corporate agricultural entities who stand accused of returning the west to dust-bowl conditions.  Internationally we make a lot of noise about free markets, yet pointing fingers at foreign subsidies is disingenuous when we have such a protected agriculture in America.


And it’s not just us---Europe supports its farmers in the most grievous ways, crippling market innovation in the false name of supporting a lifestyle.  France loves its farmers and Italy laments the passing of a small-farm culture.  Still, Brussels demands the most horrendously complicated web of subsidies, none of which take into consideration the individuality of small farmers (see my May, 2002 article). 


No industry has long survived government-subsidy meddling and farmers as well as farm communities throughout the world will be the better off for being cut loose to grow what the market will buy.