January 21, 1990, Sunday, Final Edition

SECTION: OUTLOOK; PAGE B5

LENGTH: 2265 words

HEADLINE: Lock the Barn! The Farm Bill's Coming;
They'll Soon Be Planting Corn and Feeding the Hogs on Capitol Hill -- but Be
Wary

SERIES: Occasional

BYLINE: James Bovard

BODY:
FARMERS CAN expect another bumper crop of federal dollars again this year.
The seeds of a new five-year farm bill have been carefully planted on Capitol
Hill, and the fertilizing will soon begin in earnest. In the coming months,
representatives and senators will declaim on the plight of the suffering
The Washington Post, January 21, 1990

plowman, the brutal conditions in rural America and the nation's moral
obligation to support its tillers of the soil. In the end, Congress will
authorize another half-decade of agricultural subsidies costing the taxpapers
and consumers $ 100 billion or more.

Unfortunately, federal farm policy is largely the harvest of the
fabrications, scams and absurdities concocted by farm-state members of Congress.
There is no real reason to perpetuate billion-dollar bailouts for millionaire
planters and ranchers, or an Agriculture Department bureaucracy 100,000 strong
muddling the affairs of 300,000 full-time farmers. The sooner farm programs are
abolished, the better off the nation will be.

So before the public accepts another deluge of aid for some of America's
wealthiest citizens, it would be wise to consider some of the verbal gymnastics
that have occurred on Capitol Hill in recent years to justify agrarian
assistance.

The chairman of the House Agriculture Committee, Kika de la Garza (D-Tex.),
best summed up the spirit when Congress enacted the 1985 Food Security Act,
which has cost taxpayers and consumers more than $ 130 billion, "I heard a
quotation once that said, 'Facts are the enemy of truth.' So forget all the
facts and listen to the truth." Some examples of the representatives' "truth":
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Rep. Jamie Whitten (D-Miss.), known as the "permanent secretary of agriculture"
because of his immense power as chairman of the House Appropriations Committee,
declared in 1987: "About half the farmers are either bankrupt or on the verge of
bankruptcy." In fact, U.S. Department of Agriculture statistics show that less
than 20 percent of the farmers were under severe financial stress at the close
of 1987. Whitten declared in 1988 that "government policy [in the 1980s] forced
the bankruptcy of 261,000 farmers." In reality, fewer than 50,000 farmers went
bankrupt in the 1980s. In 1985, Rep. William Thomas (R-Calif.) warned: "The
stage is set for what will be a literal holocaust in rural America . . . ." Yet
that year, the average full-time farmer had a net income of $ 102,000, according
to USDA. In 1987, Rep. Byron Dorgan (D-N.D.) declared: "The prices that the
farmers are now receiving are so low that the majority cannot make a living." In
that same year, farmers' net cash income set a record and the average full-time
farmer earned more than $ 120,000, according to USDA. The average full-time
farmer is now a millionaire -- with a net worth (assets minus liabilities) of $
1.003 million as of Dec. 31, 1987. The more wasteful and abusive the farm
program, the more inspired representatives' defenses become. The tobacco
program, which forced farmers to slash production by 40 percent in 15 years, was
defended in 1985 by Rep. Tim Valentine (D-N.C.): "The issue here is whether
tobacco will continue to be grown by American farmers or by overseas growers."
In truth, the tobacco program itself -- with its requirement that farmers must
have a federal license for every hundredth of an acre of leaf they grow -- is
The Washington Post, January 21, 1990

the only thing preventing more American farmers from producing and exporting far
more tobacco, and U.S. government policies that drive up world tobacco prices
are encouraging foreign farmers to boost production and take over the world
market.

Likewise, Rep. Norman Sisisky (D-Va.) praised the peanut program because the
"stable supply of peanuts is important to the nutrition of our young children."
But the peanut program, with its legion of "peanut police" to enforce USDA
restrictions on production, actually exists to create a permanent artificial
domestic scarcity of peanuts that inflates peanut prices.

The sugar program, which uses quotas to slash the amount of sugar foreigners
can export to America, is widely recognized as subverting U.S. foreign policy by
disrupting the economies and impoverishing the people of Latin America and the
Philippines. De la Garza defended the sugar program in 1985 by arguing that "you
do not bolster democracy abroad by killing American jobs." According to that
logic, the more protectionist the United States becomes, the safer democracy
around the world will be.

Rep. Virginia Smith (R-Neb.) represents corn growers who benefit from high
sugar prices by selling their corn for high-fructose corn syrup, "The [sugar]
program is a responsible, income-generating program," she has asserted. "The
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program has generated an annual income of over $ 75 million." It's true that the
sugar program provides tariff revenue of $ 75 million a year from taxes on James
Bovard is an associate analyst for the Cato Institute and author of "The Farm
Fiasco." imported sugar, but it also mulcts consumers for $ 3 billion a year by
driving U.S. prices to three or four times the world price, according to the
U.S. Commerce Department.

The dairy lobby, which donates $ 2 million a year to help members of Congress
understand the metaphysics of milk, has inspired many leaps of logic on Capitol
Hill. In 1988, Rep. James Jeffords (D-Vt.) -- now a senator -- declared, "The
days of the dairy surplus are gone" and warned that unless Congress raised dairy
price supports, "the potential impact upon the consumer [from shortages] is
incredible." At the time, USDA had on hand more than 5 billion pounds of surplus
dairy products, and milk production was well on its way to setting an all-time
record. USDA ended up buying more than 8 billion pounds of milk products in 1988
-- but Congress boosted dairy price supports for the heaviest milk-production
period of 1989 anyway, thereby signaling dairy farmers to produce still more
milk. Farm-state members of Congress devote themselves to driving up food prices
and then warn that, if it were not for farm programs, food prices would be much
higher. Rep. Harold Volkmer (D-Mo.) declared in 1988, "If we do not have . . . a
food policy in this country, we could very easily find that in the next year or
two we would have a loaf of bread at $ 5 a loaf . . . . You could have a
The Washington Post, January 21, 1990

gallon of milk out here at $ 10 a gallon if you want that." Yet, in 1988, USDA
rewarded farmers for not planting on 78 million acres of cropland (equivalent to
Indiana, Ohio and much of Illinois) for the explicit purpose of raising grain
prices. In 1986 and 1987, USDA paid farmers more than a billion dollars to kill
almost 2 million cows in an attempt to reduce milk supplies and drive up dairy
prices.

Congress has forced the Farmers Home Administration to provide endless
bailouts to inept farmers based on the doctrine that every farmer is worth
saving at any cost. The harvest: the General Accounting Office reported in late
1988 that Farmers Home has lost $ 33 billion, and experts estimate that FmHA
could continue losing $ 10 billion a year from now till the end of the decade.
The GAO concluded that almost a quarter of the bankruptcies among FmHA borrowers
were due in large part to the farmers having received too many
government-subsidized loans and being buried by their debt-service load.

One of the biggest ruses is the claim that farmers themselves don't receive
farm welfare. De la Garza declared in July 1988 that the aid "does not go to the
farmer. He is but the conduit through which that money is sent out into rural
America and throughout the United States." According to this logic, any
handout-recipient who spends his government check is not really a
handout-recipient. If the government gave every American writer $ 3,000 to buy
The Washington Post, January 21, 1990

a new computer, would one argue that the subsidy actually went to the computer
industry?

De la Garza has also attempted to mislead the public about how much aid
individual farmers receive. At a July 1989 hearing on the 1990 Farm Bill, de la
Garza sought to silence criticism of excessive handouts to individual farmers:
"Anyway, nobody can get more than $ 50,000." This is a joke: Congress in 1987
explicitly allowed each farmer to collect up to three $ 50,000 payments; cotton
and rice farmers are allowed to collect $ 250,000 each year; and dairy farmers
have no limit on how much they can receive.

Farm members of Congress usually view any program that raises farm income, no
matter what the cost, as a success. Southern members of Congress are bragging
about the 1985 five-year farm bill's marketing loans for rice. Sen. David Pryor
(D-Ark.) said, "Our [rice] program is working . . . . The program is beginning
to put money in the farmers' pockets." And well it should. The rice program has
cost the equivalent of almost a million dollars per full-time rice farmer since
1985; in 1986, the program cost taxpayers $ 4 for every $ 1 of income realized
by rice growers. Yet, many farm representatives see the rice program as a model
for other programs.
The Washington Post, January 21, 1990

The most enduring delusion of farm policy is that farmers are unlike other
mortals -- they do not respond to higher or lower prices by increasing or
reducing production. Sen. Patrick Leahy (D-Vt.), chairman of the Senate
Agriculture Committee, delcared in May 1988, " . . . simply bringing down the
dairy price support [to get rid of the dairy surplus] is not a way to cut
production." According to Rep. Whitten, "To meet the decreased prices, the
farmer has always increased volume. It's the only way to offset a drop in
price." But the less profitable farming is, the less farmers will eventually
produce. There is no evidence in American history of commercial farmers as a
class perennially producing a crop at a loss.

Members of Congress routinely speak of crop surpluses as if they were an
inexplicable phenomenon that can be dealt with only by mandatory federal
production controls. As Rep. Dorgan declared in 1985, "For more than a decade,
federal farm programs have forced America's farmers to overproduce in a hopeless
effort to meet rising costs in the [face of] disastrously low crop prices." But
perpetual surpluses occur only because Congress perpetually rewards farmers for
overproducing. As a 1988 USDA study by economist Dan Dvoskin put it, "Excess
capacity is a much more serious problem for the [major subsidized crops] than
for the rest of [unsubsidized] U.S. agriculture." Congress first creates a
problem -- and then points to the problem as an excuse to perpetuate its control
over a disrupted industry. If Congress denounced higher productivity in the
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auto or steel industry, it would be laughed at, but agriculture is somehow
different.

Members of Congress frequently claim that farm programs are a success because
Americans spend less of their income on food than do citizens of any other
country. Rep. Jim Slattery (D-Kan.) asserted on June 16, 1988: "I would observe
that for the taxpayers in this country to have to contribute $ 200 a year [each]
. . . when it comes to the federal government's involvement in agriculture is
not very much to pay for that cheapest, best, most reliable food supply in the
history of the world." In reality, American food prices are not so low; American
incomes are high. As countries become more prosperous and as incomes rise,
citizens naturally spend a smaller percentage of their income on food and more
on other items. But this hardly justifies retaining farm policies that drive up
food prices.

Many members of Congress receive benefits from federal farm subsidies. Sen.
Mark Andrews (R-N.D.) received $ 20,000 a year for producing crops for which he
helped legislate subsidies on the Senate Agriculture Committee. If government
employees wrote a policy and then collected a windfall, they might soon be
catching up on their reading at Allenwood federal prison. But Congress
effectively exempted itself from the Ethics in Government Act, which prohibits
conflicts of interest for other government policy-makers. To listen to members
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of Congress, one could get the impression that federal intervention is a
prerequisite for farm production. But the vast majority of farm products raised
in the U.S. receive no subsidies and no protection. The federal government
effectively guarantees peanut growers double the world price for their harvest,
while pecan growers prosper with no federal aid. The government provides more
than $ 5 billion in protection and handouts to dairy producers each year, yet
pork and chicken producers receive no federal aid. Corn growers received $ 12
billion in 1987 while soybean producers received little or no aid.

Some members of Congress have worked hard to reform agricultural programs.
Sen. Jesse Helms (R-N.C.) has striven to reduce wasteful spending in farm
programs (except for his state's tobacco and peanuts), while Rep. Jim Olin
(D-Va.) has struggled to make the dairy program less absurd. Rep. Barney Frank
(D-Mass.) has been the most outspoken point man against farm boondoggles in
recent years. Rep. Charles Schumer (D-N.Y.) has exposed the failures of export
programs. And Rep. Richard Armey (R-Tex.), who led the fight to close down
ancient Army bases, may soon be leading the fight against farm program abuse.

Despite such hopeful signs, farm-lobby campaign contributions have
effectively prevented outbreaks of intellectual curiosity and economic common
sense on Capitol Hill in recent years. The unanswered question remains: How much
of this misleading congressional farm-policy rhetoric is ignorance, and how
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much is conscious deception?

++++

The Washington Post



February 3, 1990, Saturday, Final Edition


SECTION: EDITORIAL; PAGE A23; FREE FOR ALL

LENGTH: 1202 words

HEADLINE: Unfair to Farmers

SERIES: Occasional

BODY: Good farmers know that in attacking a manure pile with too great a vengeance, they risk becoming indistinguishable from the object of their labor. I therefore had some trepidation about approaching the wretched heap James Bovard piled up in his attempt to discredit the entire farm community and with it Congress for supporting any farm bill of any kind whatsoever ["Lock the Barn! The Farm

The Washington Post, February 3, 1990


Bill's Coming," Outlook, Jan. 21]. However, I felt I had to take the risk.

I farmed in Kentucky for 20 years and lost my own farm in 1985. I know the 1980s have seen the loss of 275,000 family farms, and that of all farms remaining, fully 50 percent, are in severe economic crisis. I know that Bovard's article was a series of distortions.

Bovard would have his readers believe that farm bills have produced an annual net income in excess of $ 120,000 and assets in excess of $ 1 million for the "average full-time farmer." What Bovard does not tell his readers is that these figures apply only to a little more than 9 percent of full-time farmers (1989 Fact Book of Agriculture, Publication No. 1063, USDA, page 35). Bovard tries to discount the remaining 90 percent of farmers because they work second jobs and, therefore, are not strictly "full-time" farmers.

The truth, however, is that most farmers are "full-time" but still hold down "full-time" second jobs just to stay in farming (1989 Agricultural Chartbook, Agricultural Handbook No. 684, USDA, page 7, table 6).

Having gotten away with the one deception, though, Bovard heaped others on the pile. He countered Rep. Jamie Whitten's (D-Miss.) claim that as many as 261,000 farmers have been forced into bankruptcy during the past decade with his own figure of fewer than 50,000. He didn't bother to cite the source of his figure, but had he had a care for the truth, he would have found that Whitten was about right (1989 USDA Fact Book, page 35, table 13).

Having disposed of the farmers, Bovard then took aim at Sen. Patrick Leahy (D-Vt.), chairman of the Senate Agricultural Committee, and all of Congress for even considering a farm bill, much less actually voting for one. "To listen to members of Congress," he wrote, "one could get the impression that federal intervention is a prerequisite for farm production. But the vast majority of farm products raised in the United States receive no subsidies and no protection."

Which is it? Either farmers are subsidized even unto wealth by government programs, or they are not. Bovard tries to have it both ways. -- Terry Maugans

If James Bovard's piece on the farm program was as inaccurate as the section he devoted to the U.S. sugar program, he should return to square one.

He contended that the sugar program "mulcts" consumers for "$ 3 billion a year ... according to the U.S. Commerce Department." Mulcts' synonyms are swindle, defraud, cheat and bilk. Strong language to use for discussing legislation approved by 262 representatives and 60 senators.

Most particularly is it strong language since Bovard is quoting a discredited 1988 study done by the Department of Commerce in 1988. Thoughtful economists believe that study manipulated statistics to provide ammunition to those who seek to destroy the U.S. sugar industry -- an industry that has an $ 18.459 billion annual impact on the American economy, a fact Bovard conveniently overlooked.

-- David C. Carter

The Washington Post, February 3, 1990


The writer is president of the U.S. Beet Sugar Association.

James Bovard has emerged as one of our leading critics of federal farm programs. Certainly they deserve to be criticized, but he failed to mention some salient facts.

True, as he said, the U.S. Department of Agriculture employs 100,000 bureaucrats, but they do not spend all of their time "muddling the affairs of 300,000 farmers." Nearly half the USDA budget is spent on the food stamp, school lunch and Women, Infants and Children programs. One fourth of USDA employees work for the Forest Service and have nothing to do with farm programs. And he ignores the USDA's food safety inspection service and its research into human nutrition.

It is easy to condemn the farmer for being on the take from the federal government. But there is more to this question than Bovard's commentary revealed. Historically, the Agriculture Department has provided research and methods to improve crops and better breeding of livestock. Then came the Great Depression and a series of other programs to improve farm income, stabilize price and conserve the soil. In each case the growth of these programs met a specific need, but times have changed and we do need farm program reform consistent with a changing environment. Why is reform so difficult?

First, on the question of export subsidies, President Reagan proposed sweeping reform in the General Agreement on Tariffs and Trade trading system for farm products and an end to trade-distorting subsidies. President Bush continues to work toward this end. In the meantime, we have no choice but to fight fire with fire and challenge the subsidies of the European Community.

Second, on the subject of farm-program subsidies, it should be noted that they serve a constituency beyond the farm gate. If they are to be reformed, other interests must be reassured.

The consumer expects and indeed demands a reasonably priced and regular supply of high-quality food. Farming is a volatile industry in which weather plays a great role. In 1987, for example, our grain supplies stored under government loan were referred to as a surplus, but with the drought of 1988 that "surplus" miraculously became a valuable "reserve." Even the most adamant critics must admit that our farm programs played a role in ensuring abundance in times of national emergency.

Americans, on the whole, spend less of their disposable income on food than any other developed nation. And we like it that way. We are willing to pay something for conserving the soil and the stability of supply. The primary agency for dispensing income support to farmers is called the Agricultural Stabilization and Conservation Service. The 1985 Farm Bill is called the Food Security Act of 1985. This farm bill is not just for farmers.

Finally, there are social implications that are nostalgic and resist change of any kind. The public wants more for less but wants every farm left on the land just as it was 20 years ago. No industry can remain the same decade after decade. All of this leads to a strange mix of farm programs. Reform is needed, but we must be aware that reform will likely mean more volatile and higher prices for food. Today, the taxpayer picks up part of the tab for food through farm program subsidies. Reform also will force more rapid social changes in

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rural America than we have seen so far.

So, what do we do? We should gradually reduce government's role in agriculture. Government programs distort prices and production decisions. Often, they are counterproductive; but the task of dismantling them will not be easy and will take a long time. For now, farmers need not carry all the blame. -- John R. Block

The writer is president of the National-American Wholesale Grocers' Association and a former secretary of agriculture.

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