HARVESTING POVERTY , The Farmland Bubble

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http://www.nytimes.com/2003/12/26/opinion/26FRI1.html?th

 

HARVESTING POVERTY The Farmland Bubble

Published: December 26, 2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The family farm. Few institutions are more central — iconic, even — to America's

self-image. The words themselves conjure up Norman Rockwell and a shared

national heritage that extols self-reliance and the conquest of the frontier.

 

Politics tends to exploit easily romanticized icons, and the family farm has not

been spared. It has been used by special interests to justify policies that cost

taxpayers hundreds of billions of dollars for subsidies that do little to aid

real small farmers. It has been hijacked as an excuse to betray America's

free-market values and hurt developing countries.

 

Poor cotton farmers in places as remote as Burkina Faso know much more about our

agricultural policies than most Americans do, and they express confusion about

the United States government's stated commitment to small farmers. In reality,

the farms that benefit most are on an industrial scale. American small farmers

are victims of federal agricultural policies, just like the African cotton

growers, who cannot compete against the American product. American cotton —

thanks to subsidies — often sells for less than it costs to grow.

 

The real small farmers' opportunities are limited by high land costs. The stream

of subsidy dollars flowing from the federal Treasury — about $20 billion last

year — has a way of turning arable acres into welfare tickets. That's why in

2001, despite low commodity prices and an ongoing exodus from rural America,

farmland values in places like Iowa were hitting all-time highs. Subsidies

inflate the price of land by an estimated 25 percent.

 

According to an Environmental Working Group analysis of federal data, the

subsidies of the past eight years were equivalent to a fifth of the total value

(land and buildings) of all the farms in the nation's 100 most-subsidized

counties.

 

That flood of federal money can create a real estate bubble even in places where

the death rate is exceeding the birth rate. One of the reasons American farmers

feel that they are constantly struggling to break even is the amount they have

to pay to buy or rent overpriced farm land in parts of the country where the

prices of virtually everything else are among the cheapest in the nation.

Roughly half of the nation's agricultural land is rented out, and subsidies

disproportionately benefit landlords rather than the actual farmers. The fact

that federal policy is making it harder for younger farmers to buy land is one

reason that three Midwestern Republican senators, Chuck Hagel, Richard Lugar and

Charles Grassley, broke ranks with the once-monolithic farm lobby to vote

against the 2002 farm bill.

 

This year's recovery in commodity prices is a reminder of the fact that world

markets still offer many sectors within American agriculture an opportunity to

thrive without subsidies. For farmers and communities unable to succeed over

time, the government can set up a far more modest rural aid program — one that

encourages economic development in ailing towns and land conservation — without

distorting global food trade. What Uncle Sam cannot do is reverse the

technology-driven concentration in agriculture. The number of farms in the

United States has declined from nearly six million a half-century ago to some

two million today, and we now grow a lot more food on fewer acres.

 

Many of those large-scale farms are still family ventures, run by people with a

commitment to solid rural values. They deserve respect — they just don't deserve

$20 billion in subsidies.

 

 

 

 

 

 

 

 

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