Farm Subsidy Reform....

The Washington Post ran an article today entitled "In North Dakota, Farmers Wary of Cuts to Subsidies." The Post interviews a farmer, Owen Olson, who farms 1,400 acres near Medina, ND. He is "is among the men and women who sow the seeds, harvest the crops and oppose this year's attempt by President Bush and Congress to cut federal farm assistance. They speak of hardship and fairness while questioning the votes cast for a president who scored big in the Midwest, in part by promising to do well by farmers."

Olson said that if it weren't for the federal government no one would be farming. South Dakota Politics has an interesting take on this. Ken Blanchard doesn't believe that "If this is true, of course, it means that farming in North Dakota represents an economic loss for the nation as a whole. We have farmers in North Dakota not because it pays to farm there; rather, we flood the plains with federal money so there so we will have farmers. Surely there is something wrong with this picture. I don't believe it for a moment." I tend to agree with Ken because according to the Post, "Sparsely populated North Dakota leads the nation in production of durum and spring wheat, barley, lentils, pinto beans, sunflower oil and honey. It produces 95 percent of the country's flaxseed and 90 percent of its canola." North Dakota farmers are the most productive in the world.

The Post then adds, "No one is talking about eliminating federal subsidies, just reducing them. But in North Dakota, where more than three in four farmers receive payments -- the highest percentage of any state -- the proposals working their way through the hearing rooms on Capitol Hill are big news.
Bush proposed cuts of $5.7 billion from agricultural programs over the next 10 years as part of a deficit reduction package. The House Budget Committee set the figure at $5.3 billion, while its Senate counterpart said $2.8 billion should be trimmed.
Exactly how much will be cut and from which programs remain to be determined this summer. Congressional leaders must settle on a target, which can be met in many ways, including by cutting food stamps."

Farmers have many problems. First and foremost is the weather. Rising fuel, seed, chemical, and equipment costs are other big problems.

Blanchard makes another good point. The prices of some of these items could reflect the amount of money the federal government has given to farmers. If people who produce combines know that farmers get so much money from the government they can maybe jack their prices up. I do not know if that's the case, but it seems logical that that could have some affect.

The basic problem with the federal susidy problem is that the money isn't going to the right places. According to the Post, "Farm income has been up the past two years, yet Congress has channeled more than $130 billion in subsidies to farmers in less than a decade. Seventy percent of the cash goes to 10 percent of the producers, particularly cotton and rice farmers in the South."

Further explained... if the gov. gives farmers $10, but $7 go to agribusinesses and large farms, and the federal deficit is at $50... then why not cut farm subsidies from $10 to $8 but give $6 of it to small and medium farms and cap the money going to large farms and agribusiness at $2. The federal budget deficit is down, small and medium farms get more, and large farms and agribusinesses don't get money that they don't need. I know it's not as simple as this, but this is a logical starting point.