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WORD COUNT
483
MAY 21, 2008
THE FARM SUBSIDY
DERBY – by Ryan Alexander
As they sipped their
mint juleps at the Kentucky Derby, racehorse owners celebrated securing
a new Washington windfall.
That’s right. With
record budget deficits and American families struggling to make ends
meet, senators, led by Mitch McConnell, secured $500 million in
depreciation and capital gains tax breaks for racehorse owners in the
current farm bill.
Only in Washington,
D.C. would people describe horse racing as part of farming. Another one
of the more wasteful provisions is hundreds of millions in tax breaks
for timber companies. By changing the tax treatment of timber sales and
by “modernizing” timber real estate investment trusts, timber companies,
such as Weyerhaeuser, will receive a major windfall to the tune of $435
million over 10 years, according to some reports.
But what does belong
in the farm bill is a revamp of subsidy programs that go to millionaires
who may or may not be active farmers. Proposed farm bill “reforms”
include increasing the annual direct payment to farmers, removing the
limits on marketing loans, and promising that the government will buy
excess sugar from the already highly subsidized sugar industry. Rather
than fixes, these are massive expensive farm bill failures.
Those in farm country
are screaming bloody murder at the mention of any reductions in the
dollars flowing to agriculture. At a time of record commodity prices
and farm incomes we don’t know why they need billions in taxpayer
handouts.
A handful of House
lawmakers at least tried to minimize the fiscal damage of the next farm
bill. Congressmen Jeff Flake (R-AZ), Ron Kind (D-WI) and Paul Ryan
(R-WI) urged farm bill negotiators to oppose an increase in annual
direct payments, and to adhere to promised budgetary guidelines and
fiscal discipline. Direct payments, which are paid out regardless of
crop price or even if a crop is grown, cost more than $5 billion a
year.
Meanwhile, here at
home and around the world, ethanol, another agricultural beneficiary of
federal subsidies and mandates, is raising eyebrows. Ethanol has become
a factor in recent food shortages. It’s simple supply and demand.
Plentiful ethanol subsidies are driving farmers to plant more corn on
the limited amount of land suitable for growing food. That means less
land for other crops like soybeans and wheat. The smaller supply of food
drives prices up.
To its credit, the
White House has been consistent in its farm bill demand: fix it or face
a veto. So lawmakers who wante a farm bill had a golden opportunity.
Rather than support new tax breaks for horse racing and timber companies
and subsidies to millionaire farmers, they could have ended the gravy
train for fat cat farmers by not increasing the automatic giveaways in
the direct payment system and capping payments to wealthy farmers. With
good economic times in farm country, now is the time to create real
reform that creates a healthy safety net for the farm communities.
--
Ms.
Ryan Alexander is President, Taxpayers for Common Sense --
a non-partisan
federal budget watchdog.
www.taxpayer.net
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