Pelosi’s farm boondoggle

Amid the most prosperous farm economy in decades, as crop prices and farm incomes approach or exceed record levels, President Bush this year requested Congress to limit taxpayer-financed agriculture subsidies to farmers whose annual adjusted gross income was less than $200,000. In a mockery of reform in House Speaker Nancy Pelosi’s Democrat-controlled chamber, the House Agriculture Committee has produced a farm-policy reauthorization bill that would dole out subsidies over the next five years to farmers with annual incomes as high as $1 million.

That’s not all. The bill would also increase by 50 percent the annual maximum direct payment to qualifying farmers from $40,000 to $60,000. This, mind you, is in a country where the median household income in 2005 was $46,376, which is 3 percent below its 1999 inflation-adjusted level. The direct payment would double if the farmer’s wife also tilled the soil. That brings it to $120,000, more than two-and-a-half times median household income. The bill would also remove the $75,000 cap for “marketing loan payments.”

Overall, the big winners would continue to be the five major commodity programs — cotton, rice, wheat, corn and soybeans, whose farmers pocketed about $17 billion of the $19 billion in 2006 subsidies. Today, fewer than 10 percent of the nation’s farms collect nearly 60 percent of the subsidy payments, while nearly 60 percent of farmers receive nothing. This will not change over the next five years if the House approves this travesty of a bill, which it will consider this week.

To ensure Mrs. Pelosi’s embrace of its flawed bill, the House Agriculture Committee approved $1.8 billion in new payments over the next five years for the fruit and vegetable industry. Particularly galling is the continuation of the direct payments, which were introduced in 1996 under the revolutionary free-market-oriented Freedom to Farm Act. To wean the major-commodity farmers off the welfare dole to which they had become addicted since the New Deal era, the 1996 bill sought to replace traditional farm subsidies with a system of fixed, declining annual direct payments. These “transition payments” would cease after seven years.

However, “emergency” supplemental appropriations during the late 1990s routinely raised the welfare payments to farmers. The 2002 farm reauthorization bill reinstated the traditional subsidies and also renewed the direct payments, which had been established in 1996 to wean farmers from their subsidies. In this era of “Democratic reform,” the new bill would retain both forms of welfare.