The Washington Post is carrying a series on the farm welfare system. Fellow blogger Doug Mataconis wrote yesterday and again today about it. Just in case you somehow thought welfare was limited to the proverbial single mother with five kids, here’s a chance to see another federal giveaway of our tax dollars.
There’s alot more to the Post report that’s worth reading, but the lesson is clear; reforming welfare doesn’t work, because the lobbying groups in favor of expanding it will always come back again later and find a way to get the program expanded yet again. The only solution is to cut the beast off completely.
I agree.
VIVIAN J. PAIGE | All Politics is Local 
I agree this sytem is a mess, but some of what is reported is misleading. In todays story they talk about a guy who grossed a tidy $500,000. What they don’t say is that his net is only $25,000 and without the subsidy it would likely be zero.
In another paragraph they describe a guy who sold his crop at one price and then later locked in his support payment at a lower price in order to get a higher payment. What the article doesn’t say is that his total for both transactions works out to $180 per acre. And again that is gross payment before all his expenses are taken out. Would you really be willing to work your farm for something like $20 per acre? You can’t even get you grass cut for that.
Yes, this system is broken, but the real problem is that the small operators (like myself) get nothing. Then we get to listen to the nut cases that want to prevent us from getting out by squawking about how we are losing “prime” farmland. You can only afford to lose money for so long, before you have to get out. but with todays land use environment, you can’t do that either.
Ray,
I responded to your comment on this issue on my blog, but will restate it here.
Ray,
Actually, I think that your math makes my point for me. Without the subsidy, Kuhfuss would be losing money. In a normal market not distorted by the LDP, he would have to find a way to deal with that. The options are many — he could cut expenses, change to different crops, or maybe even decide that it no longer makes economic sense for him to farm the land and that it should be put to a more productive use.
By subsidizing his business and masking the true economic condition of that business, the LDP makes him think everything is okay and he continues to operate in an inefficient manner.
I agree with you entirely.
Believe me, he cannot cut expenses. If he changes to another crop, then it is the same problem with another crop. There is simply too much surplus land to make a decent living at it. He may, and probably should decide that it makes no ecoomic sense for him to farm, and he should put it to a better use. But he is prohibited from doing that because he is zoned for agriculture. Who could he sell to, except another farmer who would face the same conditions, and probbly at a higher land cost? Because of his zoning he is prohibited from operating in an efficient manner and getting out.
In my case, I am virtually required to farm, and farm at a loss. If I do not, I will be taxed as if I was suitable for a housing development, except that development is denied to me. So, it is farm and lose money, or don’t farm and lose still more money.
I actually believe it is worse than that. My county Supervisor told me in so many words, that his goal for my property would be to have somebody rich buy it. Rich enough to place it in conservation easement and take a giant tax subsidy.
Since another farmer is not going to buy it and it cannot be used for anything else due to zoning, the available market has been dramatically reduced. This means that some rich person will eventually get a fine estate, not only at a discount to the true market value, but with a subsidy as well.
But there are othe ways in which the market is not acting in an efficient manner. I am prohibited from any activity near the stream beds that cross my land. This is for the benefit of people living downstream from me, yet they pay me no land rent. People want to preserve “their” viewshed, but don’t pay me for providing it. When I look at the farm, yes, it is lovely, but all I see is all the work that is lurking in the bushes, that they don’t see.
New Zealand and some other places now pay land owners for environmental services (over and above whatever subsidies they have).
So, I agree with you about markets and operating efficiently, but you need to look at the total system and not focus on one narrow incentive. It is a badly run incentive, I agree. But it does buy us things other than badly run farms. Lets look at the situation and figure out what it does buy, and how we can buy those things more efficiently.
Ray
You make some valid points. My question to you is what is the answer? Should the laws be changed where you live allowing you to re-zone the land and sell it for more money?