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Subsidy Secrecy – Intro to GMOs Part 3
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By Deanna Kohlmeyer

In my previous articles about GMOs, I briefly explained what GMOs are, why they are not safe for human consumption, why and how they are harmful to the environment, and who is responsible.  Like anything, there is much more to the story.  Farming advocates would like you to believe the Farm Bill that is regularly revisited by Congress is still helping struggling family farmers continue to grow good crops at reasonable market prices and keep Americans well fed with essential healthy foods.  The truth is this could not be farther from the truth.

U.S. Farm Subsidies

The farming subsidy program is by far one of the most absurd yet legal ways to squander taxpayer dollars.  Currently, there is absolutely no use for farming subsidies in the United States. The subsidy program was implemented during the Great Depression as a temporary emergency relief program for farmers. It was never intended to still be in place over 8 decades later.  At the time it was the right and logical thing to do, but as farmers began to form interest groups that would claim such programs were absolutely necessary and important for their livelihood and future success of their farms, removing the subsidies became near impossible.

There are three essential elements to human (or any animal) existence: water, food and shelter.  Targeting and controlling one or more of these elements in any way can bring the affected people to their knees.  This borders on governing by fear.  No one should ever fear that they might not have access to pure, uncontaminated, non-toxic food or water.  More so, people should not be unknowingly funding the growth of GMOs as well as the growth of the companies and individuals who farm them.

 

Farm Subsidy Myths and Truths

Myth – Subsidies are required to keep farmers out of poverty in order to maintain their growth and encourage younger farmers to get involved in the industry.

Truth – The farming industry is growing at an enormous rate, while pushing out the small family farmers and squeezing more money from taxpayers.  Most farming subsidies go to an increasingly smaller percentage of farmers, meaning they are getting wealthier and wealthier and smaller family farms are either being bought out or just getting out because they do not qualify to play the subsidy game.

 

Myth – Subsidies are needed to maintain inexpensive food supply.

Truth – Subsidies are paid regardless of production losses which drives the prices down and once again increases potential subsidy costs.  It is a win-win situation for large farmers.  The majority of these farmers are growing mainly corn and soybeans (among other commodity crops), which we know to be two of the largest GMO crops grown in the United States.  And since GM seeds promise to produce higher yields, driving the prices of crops down, thus increasing subsidies, the incentive is too good for these farmers to pass up.

 

Myth – We must continue to protect farmers from natural disasters.

Truth – Not only do we spend billions of dollars a year on farm subsidies to grow mainly GMO crops, nearly just as much is paid to farmers in some form of crop insurance, regardless of whether or not there was a disaster that affected the crops. A comparison would be if a homeowner were paid the amount of their homeowners insurance every year, even if it wasn’t needed.

 

Myth – Subsidized farm crops and how they grow them it is a matter of national security.

Truth – Currently the United States grows far more food than is needed to feed its citizens and with more than enough to cover export demands.  That’s before you ever get to ethanol surpluses.

 

Myth – The U.S. must keep up with international agricultural policies and respond with trade barriers.

Truth – Instead of welcoming imports of certain crops to which American farmers do not have a comparative advantage, the United States enacts trade barriers that ultimately raise prices for American consumers. Again, this is a very counterintuitive approach on behalf of our government.

 

Not a Free Market

The longstanding federal interest in farm businesses and its commitment to thrive is extremely costly to taxpayers and greatly distorts the economy.  Subsidies induce overproduction, driving down crop prices and thus increasing the demand for more subsidies.  Consumer demand is in no way reflected in what subsidized farmers grow. It is not a free market, nor is it helping the taxpayer in any way.   Brian M. Riedl, as a non staff member for the Heritage Foundation stated in an article:

“In a free market, low prices serve as an important signal that supply has exceeded consumer demand and that production should shift accordingly.  By shielding farmers from low market prices, farm subsidies induce farmers to grow whatever government will subsidize, not what consumers really want.”

Riedl continues to explain how even though “agribusinesses use their enormous subsidies to buy out smaller family farms,” the blame does not necessarily lie with large agribusinesses but rather with Congress.  Even though the outcome is much to the favor of agribusinesses, Congress writes the laws.  “Taxpayer should not be required to finance the consolidation [of large agribusinesses buying out smaller farms] through farm subsidies.  By raising land values and financing consolidation, farm subsidies drive out existing small farmers and prevent new farmers from entering the industry.”

Washington is driving out small farmers, discouraging new farmers, encouraging planting of GM crops, falsely placing market values on such crops to then “require” subsidies, while gladly continuing to take money from taxpayers to make it all happen.

 

Bleeding the System

American taxpayers spend more than $20 billion per year on farm subsidies.  Farm subsidies mainly benefit large agribusinesses as opposed to small family farmers.  The national net farm income for 2013 is estimated to be $121 billion.  According to the Congressional Research Service Report for Congress on U.S. Farm Income, “in addition to record net farm income, farm wealth is also at record levels.”  The average annual farm household income for 2011 was $87,278 which is 25% higher that the U.S. average of $69,677 (2013 estimates reflect an even wider gap with farmer household income at $104,525 and median U.S. household income at $51,404.)  The average debt-to-asset ratio in farming is at 10%, and has not exceeded 15% in over 20 years.  The increasing trend in record yields carries over to livestock producers as well, who also benefit from subsidies.

More so, it is harming the taxpayer. Not only do billions of dollars a year go toward farm subsidies to grow mainly GMO crops, nearly just as much is paid to farmers in the form of crop insurance, regardless of whether or not there was a disaster that affected the crops. A comparison would be if a homeowner were paid the amount of their insurance even if it wasn’t needed.

 

Subsidy Options

The entire system is based on counterintuitive government ideologies.  It seems the USDA continues to cover the gamut of ways in which farmers can receive subsidies. There are now at least eight subsidy options:

Direct or Fixed Payments - These are cash subsidies for producers of 10 crops: corn, soybean, cotton, wheat, sorghum, barley, oats, rice, peanuts and minor oil seeds.  They are measured by acres, so the largest farms get the most subsidy payments.

Marketing Loans – Pays a guaranteed minimum price for crops, regardless of  “real” market value.  It includes at least six more crops.  Farmers can take out loans from the USDA with crops as collateral, meaning they can default on the loan without penalty.  This encourages overproduction, further driving down crop prices, and again increasing the apparent need for more subsidies.

Countercyclical Payments – Provide larger subsidies during lower market prices that are measured by historical production as opposed to current production, which is paid through marketing loans.

Conservation Subsidies – Commodity subsidies pay farmers to plant more crops on more land. The government, in turn, pays other farmers to not plant on a certain amount of land.  Essentially, removing farmland raises crop prices, but larger farmers are getting paid to do it, and the taxpayer pays for it as well in the form of higher crop prices (which by the way, are not driven by demand, but by the cost Washington places on it.)  The government then wraps this all up into what they call a Conservation Reserve Program.

Insurance – “Yield” and “revenue” insurance options are in place to protect against weather, pests, and market prices  (Isn’t Monsanto’s Roundup ready seed supposed to eliminate such forces with the exception of man-made market values)?

Disaster Aid – Congress can declare any crop damage a “disaster” and then distribute millions of dollars regardless of whether damage was sustained.

Export Subsidies – USDA can aid farmers and their food companies’ foreign sales, as well as support advertising campaigns.

Agricultural Research & Statistics – Unlike most industries, which must conduct and fund their own research programs, the USDA spends $3 billion annually on agricultural research of subsidized farm products, crop distribution and information.

 

Congress Loves Farm Subsidies!

Farm economy is flourishing and Congress continues to increase farming subsidies.  As taxpayers, we pay farm subsidies to wealthy farmers who grow mostly GMOs because the government entices them to do so.  Lawmakers are privy to information that the general public is not aware of.

The biggest farms receive the largest subsidy checks.  They are very driven and encouraged to become even larger.  And what are they most likely growing?  GMOs!  Corn alone accounts for over 80% of all crops grown in the U.S. making it the largest corn producer and exporter in the world.  But it doesn’t stop there.  Why do you think these antiquated policies are so protected by so many?  United States lawmakers as well as celebrities are also cashing in on the “subsidy scheme.”  Subsidies only encourage farmers to plant even more acres of crops.  There are apparent legal limits to amounts of subsidies, but farmers can simply divide their farms into dozens of legitimate and legal entities or sign up their family members as “farmers” in order to collect the most subsidies possible.

As long as we, the consumers, do not demand change, the United States government will continue to provide for and allow such disreputable activities with regard to the farming industry, which is not only the breeding ground for GMOs, but is a funnel for our tax dollars to go toward this inept bureaucracy and those who benefit from it.

Other countries like New Zealand and Australia have largely abandoned farming subsidies and although it took time to recover and fix the damage that subsidies were creating, their farming economy is flourishing.  Additionally, Australia has one of the most rigorous farming policies and organic certification programs in the world, as well as maintains bans on GMO crops and foods.

 

Conclusion

Sadly, we cannot change history.  But we sure can try to change the direction of the path it was intended for.   Washington is not just going to suddenly have a change of heart and do the right thing.  We, the people, must demand change!  Current farming practices are destroying ecosystems, contaminating water, producing more air pollution, creating toxic GMOs, and contributing to growth of sickly and tortured livestock, while taking money from taxpayers who have no choice or knowledge of what is really happening.  Just because we are in so deep that we feel we cannot dig our way out, does not mean we simply give up.  Searching for, understanding, knowing and holding steadfast to the truth is far more difficult than settling into complacency and comfort with the deception.

 

Sources for this article include:

https://www.fas.org/

http://www.downsizinggovernment.org/

http://mercatus.org

http://www.heritage.org/research/reports/2007/06/how-farm-subsidies-harm-taxpayers-consumers-and-farmers-too


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