- The Washington Times - Friday, November 4, 2005

The European Union says it’s considering reducing agricultural subsidies for farmers (if the United States does so too). Our government, to its credit, is calling the EU’s bluff: The U.S. has proposed cutting farm subsidies 60 percent if Europe makes its own significant cuts.

It is an embarrassing issue for the EU. Usually idealistic Europeans may lobby for the Third World poor, chastising the U.S. for insensitivity to the “other” on issues from global warming to using military force in Iraq.

Yet Europe’s state-subsidized agriculture makes it easy to export targeted Western food to poorer nations — and difficult to import produce from these countries. Since agriculture is the most basic industry in developing nations, the barriers caused by state subsidies are especially ruinous to their fragile economies. Europe spends more public tax money on feeding its cows daily than Third World nations do on their own people.

Even if Europe backs down and chooses not to trim its bloated farm subsidies, as originally agreed in principle four years ago, we should nevertheless end our own for various reasons.

First, at a time of record budget deficits, we are borrowing money to subsidize agribusinesses that are not poor. Current market prices for cotton, grains and other targeted crops are improving. They will probably only get better as the dynamic new economies of India and China continue creating hundreds of millions of affluent consumers. The future of food — like oil and other key minerals — is radically changing, as a growing global population becomes ever more voracious and capitalist.

Second, there is no logic to the present support system. Wheat, for example, is subsidized, but fresh vegetables are not. Soybeans get federal money, but not peaches. Sugar is richly endowed, but not nuts or grapes.

It gets more ludicrous: Federal water projects in the West often supply irrigation for agribusiness at well below real cost. When the resulting harvests are subsidized further, the result is Orwellian: The public provides money to water crops that it must pay out even more government cash to harvest.

Third, subsidies have not met their two primary goals: preserving the family farmer and ensuring American self-sufficiency in food production. Less than 1 percent of the population are now genuine family farmers, a romantic label that also extends, disingenuously, to original family businesses that long ago evolved into multimillion-dollar consortia.

And in lean years, true family farmers usually must subsidize their money-losing crops by working for wages in town. Meanwhile, next year, the United States will likely become a net food importer for the first time in our history.

Fourth, there is the hypocrisy. Conservatives believe entitlements enervate individual self-reliance and responsibility: The more the government gives you, the less you are likely to be self-supporting. If businessmen often argue ill-conceived welfare programs hurt the poor, what can they say about largess for the mostly wealthy? Why did David Rockefeller, Ken Lay and Ted Turner need our tax dollars to farm?

In 1996, the so-called “Freedom to Farm” legislation was supposed to phase out gradually all farm subsidies in exchange for more direct cash to farmers without government telling them what to plant or when to sell. Instead, the deal was quickly reneged on, as both Republican and Democratic legislators pandered to a small but influential population in a few key swing farm states.

Fifth, we forget the history of farm subsidies. They began in earnest as a New Deal program aimed at artificially controlling the market, insulating our farmers from imports and creating foreign markets in hopes of keeping alive millions of Americans suffering from the Dust Bowl and the Great Depression. But we should have learned subsidies and market distortions usually result in the opposite of what is intended — in this case large corporations on welfare masquerading as family farmers.

After an initial shock, the United States would thrive without subsidies. The Treasury would curtail the federal deficit by $20 billion per year. We would again show Europeans that morality consists of action, not utopian rhetoric.

Our dwindling number of actual family farmers who receive no government money at last might compete on a more level playing field with those who have done so. The market could determine, far better than government, what, how and why particular crops are grown.

We should learn the lesson of the 1990s when globalization threatened to undermine the American economy. Despite real discomfort, we kept our markets open and stressed fluidity, as businesses and jobs disappeared and reappeared in a constantly changing market-driven cycle. As a result, U.S. business leaders learned to be sensitive to fluctuations in taste and demand — and thrived in a tough global market.

Today, unlike a stagnant, protected Europe of high joblessness, the United States enjoys real growth, low inflation, low interest rates and low unemployment.

If the government gets out of the food business, farmers themselves will prove far more adept at market decisions. Indeed, we may end up with more family farmers and once again become a net-food exporting nation — ironically, the original intent of the failed federal agricultural subsidies program.

Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and author of “A War Like No Other: How the Athenians and Spartans Fought the Peloponnesian War.”



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