Opinion & Analysis
OPINION: "Give me land, lots of land under starry skies above, Don't fence me in."
Famous lines from Cole Porter's musical homage to the cowboys and ranchers who went west to live the free life away from the clutches of Big Government.
But when you read the latest US Farm Bill, which has just got bogged down in Congress, you do wonder whether the following lyrics would be more accurate.
‘‘Give me handouts, lots of handouts from the trough in Capitol Hill, Don’t end the swill.''
For a large group of predominantly wealthy American farmers seem incapable and unwilling to wean themselves off US government subsides. This is bad news for New Zealand farmers and it makes the pursuit of a free-trade agreement with the US seem futile.
The Farm Bill's origins are worthy. It goes back to the Great Depression when financial assistance to farmers was needed to help them survive at a time of overproduction and weak demand. But despite most US farmers now experiencing the benefits of growing worldwide demand, the handouts continue.
The Farm Bill, which is reviewed every five years, has a two-pronged programme - food stamps for the poor and farm subsidies for the producers. The latest bill has passed the Senate but political partisanship has seen it fail to get through the House of Representatives.
The Republicans want to slash the food stamp programme while the Democrats want to cut the subsidies. As it is the latter which has an impact on New Zealand I will focus on the handouts.
This is how New York Times writer Mark Bittman describes them: "That the current system is a joke is barely arguable. Wealthy growers are paid even in good years, and may receive drought aid when there is no drought. It's become so bizarre that some homeowners lucky enough to have bought land that once grew rice now have subsidised lawns. Fortunes have been paid to Fortune 500 companies and even gentleman farmers like David Rockefeller."
Up to US$20 billion a year is handed out to farmers and landowners. Ted Turner of CNN fame gets a payout as one of the country's largest ranchers. In fact the wealthiest 10 per cent get 74 per cent of the payouts.
The average payout is US$445,000 per recipient. Wheat, corn, soybeans, rice and cotton are the crops that benefit the most. The smaller farmers who grow "healthy" food like vegetables and fruit get next to nothing. The handout for corn growers serves as a de facto subsidy to the beef industry, to the disadvantage of our farmers.
The US dairy industry also receives subsidies through the Milk Income Loss Contract Programme. This compensates dairy producers when domestic milk prices fall below a specified level.
Although the Farm Bill is stalled it will eventually pass through Congress with little or no change. The Republicans see any change in farmers' income as an effective tax rise to which they are totally opposed. Imagine poor Turner and Rockefeller receiving less income. How could they cope?
What I find most bizarre is that US farmers, who have this image of being freedom lovers with a loathing for pinko-socialist bureaucrats in Washington, accept handouts from the state. It seems so . . . un-American! Aren't they embarrassed?
When the Business Roundtable was in its prime it used to bring out zealous American academics that were so right wing they made Ayn Rand look like a raving Marxist. They lectured New Zealand on the benefits of the free market and getting government out of our lives.
I used to like interviewing them as I would always ask them what they thought of the billions of dollars of government handouts doled out to US farmers. They would smile nervously and say of course they didn't agree with them but it was all politics and nothing much could be done about it. What hypocrites! I always felt they would have been more useful staying home and preaching to their own politicians and farmers.
As dairy and beef exports are two of our most valuable, you have to wonder what is the value in seeking a free trade agreement with the US.
There is no sign their farmers or congressional sponsors want to end the handouts. Which makes you wonder what on earth those fine Republicans, Bing Crosby, who sang Don't Fence Me In, and the greatest cowboy of all, John Wayne, would have thought.
Can you imagine John Wayne supporting state handouts to his fellow cowpokes? You would think he would be more admiring of our self-reliant farmers in New Zealand who broke through the fence of government subsidies some decades ago.
- Sunday Star Times