Both Presidential Candidates Wrong on Farm Subsidies Says Top Expert
September 24, 2004
U.S. farm subsidies are worsening the decline of rural America, says a top U.S. farm policy expert. Yet John Kerry is supporting the increased federal farm payments authorized by the new farm bill President Bush signed in 2002. Both parties may be wrong on farm subsidies. Apparently, the U.S. will keep pouring billions of federal dollars into payments, mainly for big farmers, no matter which political party wins in November-or so the pre-election rhetoric would promise.
Dr. Robert L. Thompson, newly appointed professor of farm policy at the University of Illinois points out “. . . most of the small farmers in the Western World who have escaped poverty have done so by becoming part-time farmers.” Thompson says that means the U.S. should not spend its scarce rural funds on farm subsidies but on improvements that the entire community shares-such as transportation, community colleges, broadband communications and health care facilities.
“Agriculture is such a cyclical industry that there is great advantage in new employers’ income streams being independent of it,” says Thompson. “To create non-farm jobs, rural communities must have good roads, reliable power, modern telecommunications and the other amenities that make rural communities attractive.”
“For a community to remain vital, some children who go away to college must be willing to return. Outsiders who come to manage new job-creating investments must be willing to bring their families. This infrastructure takes money, but the federal resources going to rural areas are concentrated in farm subsidies, not in rural development. The public investments essential to creating non-farm jobs aren’t being made.”
Few can match Thompson’s world-wide rural experience. He is the former Dean of Agriculture at Indiana’s Purdue University, a former Assistant Secretary of Agriculture, and served as head of the Winrock Foundation, whose projects stimulated rural development across the Third World. Most recently he was the World Bank’s top rural development officer.
“Most U.S. farm organizations argue that agriculture policy makes good rural development policy. Unfortunately, there is little merit in this argument,” says Thompson. “Most benefits from farm programs get capitalized into land prices, with the largest landowners ultimately receiving most of the benefits. This facilitates large farmers buying up smaller farms. This accelerates the evacuation of rural communities while doing nothing to make the investments that are essential to developing the non-farm rural economy.”
Thompson says federal deficits will bar increased funding for rural America in the next decade. Rural communities will have to choose between farm subsidies for a few big farmers or rural infrastructure that helps to revive their economies for all rural residents.
“Every country that has solved the rural poverty problem has created non-farm employment within commuting distance of its farms,” says Thompson. ‘The answer to low rural incomes is not to move all the rural poor to the large cities. Cities generally cannot create jobs fast enough to absorb the immigrants. Furthermore, rural migrants often lack skills that are salable in urban labor markets. For example, in 1968, Watts, Chicago and Detroit were literally in flames when they could not create jobs fast enough to employ the mostly black migrants from the rural South.”
Thompson stresses that he doesn’t want fewer farmers. In fact, he hopes the end of federal farm subsidies (and U. S. trade liberalization pressure in the World Trade Organization) would create more U. S. farming and farm-support jobs through increased farm exports. The subsidies encourage densely populated food-short countries like China and India to keep their doors barred to U. S. farm exports for fear of “surplus dumping,” he says.
What he wants is higher standards of living for all rural Americans-and his experience says infrastructure investments are the key to getting them.
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