Agricultural Subsidies

Ken Gallaway: I see subsidies as part of the equation of the government
overspending in areas where they need to cut back. The
government is bailing out the banks but my question is
whose going to bail out the government?

Nick Gillespie: In response to the current economic crisis, our government
has decided that taxpayers should bail out failing
businesses. This is nothing new. During the great
depression, the Federal Government started subsidy
programs to get farmers through the hard times. Those
programs are still in place today even though farmers are in
30% more than the national average and total farm income
has more than doubled since 2002. Ken Gallaway is a
cotton farmer in Olton, Texas.

Ken Gallaway: We’ve been always small farmers. When my father retired,
that’s when I took over and up in farming since ‘96. This is
one of my cotton fields. I love farming. It’s what I love to
do.

Nick Gillespie: But Ken isn’t your typical farmer.

Ken Gallaway: I’m unique and I’m one of the free farmers that’ll talk out
against subsidies. The problem is the subsidies make the
farmer relying on the government. And the extent they’re
bad.

Nick Gillespie: Al Motna grows rice near Sacramento and serves as the
President of the California State Board of Food and
Agriculture.

Al Motna: To be in anyone of the major commodity crops. The
subsidy system is really a major part in our income. We see
them as an investment and more and more see it less as
investment our national security.

Nick Gillespie: In recent years, farm subsidies had become increasingly
unpopular. Groups like Oxfam on the left and the Heritage
Foundation on the right. Our critical or farm subsidies as
Dan Sumner, an economist at the University of California
at Davis.

Dan Sumner: The only decent reason to have this subsidy program is
because we’ve always had them. There’s no other reason
you can’t think of. Aback on the old Soviet Union, you had
people growing all kinds of stuff that nobody wanted while
we have this same thing here. We have a bunch of rice that
costs 65 cents a pound to produce and the market isn’t
willing to pay anymore near that, that’s simple ways.
That’s taking real resources that we have as an economy
and throwing them away.

Nick Gillespie: Many people who sup port subsidies are concerned about
the plight of small family farmers.

Barack Obama: “We celebrate the family farm not only because it gives us
the food we eat but it also maintains a way of life.”

Nick Gillespie: When Franklin Delano Roosevelt introduced farm subsidies
in the 1930s, 25% of the population lived on farms. Today,
less than 1% of Americans live on farms that are larger,
more efficient and more productive than ever before.

Al Motna: We’ve been involved to this highly capital intensive
industry.

Ken Gallaway: If you’re small, you either get bigger or you don’t quit
farming because you can’t make money.

Nick Gillespie: Since 1985, Willie Nelson and his friends at Farm Aid have
raised more than $33 million to have saved the small family
farm. But despite what you may have heard, the vast
majority of the $20 billion or so that our government tolls
out on subsidies each year ends up in the pockets of the
richest farmers in America.

Dan Sumner: They were never designed to be subsidies to help poor
people.

Nick Gillespie: Most farmers including those who grow our fruits and
vegetables don’t receive any subsidies at all. While the lion
share goes to huge agri-business firms like Archer Daniels
Midland and Cargill and yet this, the long list of farm
subsidy recipients includes Billionaire’s like David
Rockefeller, Fortune 500 companies and lots of people
who’d lived in Manhattan. To get a sense of how ridiculous
farms subsidies are, let’s take a look at the sugar program.

Dan Sumner: What we do here in the United States is keep out sugar
from the rest of world. The market price’s sugars about 10
cents a pound their average price around the world. Cost
production is in 20 cent per pound ranger a little higher her
in the United States. We could buy it from places that are
good at producing sugars say Brazil for 10 cents, we pay 20
cents. That’s a waste.

Nick Gillespie: So were paying twice the world price for sugar while the
sugar industry gets rich. Why don’t we get rid of these
tabs?

Dan Sumner: The cane farms are very large and so each farm has
millions and millions of dollars riding on keeping this
stirrups at place.

Nick Gillespie: In fact, the sugar industry donated around 3 million dollars
to democratic and republican members of congress each
year. And the cotton program is no better.

Dan Sumner: Cotton farms in the United States, almost all of them that
grow up and cotton gets subsidies, the total cost of the tax
payer are tensed to run around $2 or $3 billion a year. It’s
about half the total revenue for the industry.

Nick Gillespie: Like all farm subsidies, the can program is form of
corporate welfare. But US tax payers are not the only ones
who pay the price.

Ken Gallaway: If you have a strong subsidy as they did in the past in
Cotton, then they encourages when the process are low.
People over produce which simply holds the prices down. It
keeps them down low, they’re the course seem packs
foreign countries, poor countries at Mali and West Africa
considerably. I went to Mali about two years ago, we went
to the Rice Awareness of the plot of farmers in third world
countries like Mali. Of course the poverty level there is
very extreme.

Dan Sumner: The farms are very small there. So it did affected on the
families income maybe $100.00 or $200.00 a year from the
depressed prices they get cost by the US Cotton Program.
But that one or $200.00 a year is enough to feed the child.
It’s enough to send kids to school. It’s enough to buy the
feed the child. It’s enough to send kids to school. It’s
enough to buy the school. It’s enough to buy the medicine
for the family for a several years.

Nick Gillespie: The US government refusal to scale back its farms
subsidies has lead to accusations of hypocrisy and highly
contentious World trade Organization talks.

Al Motna: Unfortunately this latest round, the WTO round more or
less fell apart.

Nick Gillespie: The WTO talks fells apart because developing countries
demanded an ends to the protections policies of rich
western nations.

Speaker: We will not be a puppy to any consensus that have not
recognized our rights to grew and trade and to survive in
this world economy.

Nick Gillespie: US farmers like Al Motna are sympathetic because they
have to compete against heavily subsidized farmers in other
countries.

Al Motna: Our competitors are subsidized, Europe to the highest
levels and Japan to the highest levels.

Nick Gillespie: If you can believe it, a cow in Europe for suits a subsidy for
around $200.00 per day which is twice the income of a
typical cotton farmer in Mali.

Al Motna: US agriculturalists will much rather compete in a free trade
environment. And if we would open those doors as
promised by many administrations for democratic and
republican, we would achieve that goal. And the need for a
safety under county, under US agriculture will greatly
diminish.

Nick Gillespie: So why doesn’t our government do the right? Set a good
example and end farm subsidies once and for all.

Dan Sumner: Most of the members of congress pay almost no attention to
these programs and in the districts where there are cotton
farmers, each of those individual cotton farmers are getting
hundreds of thousands or if not million of dollars from the
program. They really care, they make sure their member of
Congress knows that. The other reason they’re able to keep
them in place is that the detail of the actual legislation is
mind nominally complicated and frankly boring.

Nick Gillespie: Complicated, boring, and really bad public policy
especially in this troubled economic times. For Reason TV,
I’m Nick Gillespie.