Acton Commentary

Farm Subsidies: Sustaining Dependency


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The $291 billion farm bill currently up for debate in the U.S. Senate offers more of the same, discredited thinking on subsidies that ultimately harm, not help, American agriculture.

While there are some proposed measures to limit subsidies to farmers who derive two-thirds of their income from farming -- and perhaps to set some income limits in the $200,000 to $300,000 range -- no consensus has yet been reached. Yet total farm income in the United States is expected to rise 44 percent this year to $73 billion. Regardless of the reforms proposed or defeated, farm subsidies will remain the largest corporate welfare program in the country.

Subsidies foster dependence for farmers to stay in unproductive and saturated markets. A Heritage Foundation study published in June notes, “Farm subsidies are intended to raise farmer incomes by remedying low crop prices. Instead, they promote overproduction and therefore lower prices further. Expensive programs to restrict plantings are then implemented to raise prices back up.”

Not all farmers are feeding at the trough. Michigan dairyman Brad Morgan, unlike many of his fellow farmers, receives no federal subsidies. Morgan is featured in the Acton Institute documentary film “Call of the Entrepreneur,” which tells the stories of three successful business people. When faced by economic disaster and the loss of his dairy farm, Morgan developed Morgan Composting in Evart, Mich. Instead of looking for a government hand-out, Morgan relied on his wits and initiative to turn loss into gain. Morgan pioneered a new technique to turn the compost from his dairy cows into line of more than a dozen compost and fertilizer products, including the feature brand, “Dairy Doo.”

The success of his new ventures has allowed Morgan to focus solely on his composting business. Morgan Composting has surpassed $1 million in annual sales, and Brad Morgan and his family are no longer dependent on dairy farming for their livelihoods.

But what distinguishes a farmer who looks to the government in a time of need from one who takes it upon himself to think of new and innovative solutions to the old problem of poverty? Morgan says, “The amazing part of it is, this state has almost ignored some of the resources that we have available. These resources are eventually going to create jobs if we are smart enough to utilize them.”

What the Dutch theologian and statesman Abraham Kuyper said of the manual laborers of the nineteenth century is equally true of agricultural workers in the twenty-first. “Unless you wish to undermine the position of the laboring class and destroy its natural resilience,” he warned, “the material assistance of the state should be confined to an absolute minimum. The continuing welfare of people and nation, including labor, lies only in powerful individual initiative.”

The numbers we’ve seen about the scope and extent of federal farm subsidies shows that our government has done nothing to keep its material assistance “confined to an absolute minimum.”

A recent Grand Rapids Press story identified the top 50 individual subsidy recipients in the state of Michigan who received more than $100,000 in subsidies annually from 2003 to 2005. The article noted that “nearly 300 Michigan farmers got more than $200,000 a piece in crop subsidies from 2003 to 2005.”

Farmer Glen Devries told Grand Rapids Press: “I don’t know if it’s right, but if farmers wouldn’t get it, they couldn’t make a go of it.” Farmers were once known for their fierce independence. Today, the American agricultural lobby has successfully labored to make farm subsidies a staple of the federal budget -- and farmers clients of the corporate welfare system.

“People reap what they sow.” By encouraging the production of overabundant commodities the government is creating a cycle of dependency that undermines entrepreneurial initiative. Rewarding stagnation and discouraging innovation will only prolong the lifespan of a broken and harmful system of dependency.

Jordan Ballor and Ray Nothstine are associate editors at the Acton Institute in Grand Rapids.