Farming, food and federal money

Special to The TelegraphMarch 25, 2012 

Was Agriculture Week in Georgia this month really worth celebrating? Yes, if you agree with me that $15 billion annually is a big deal for Georgia. Agriculture and food processing together are critical to this state’s economy. It’s a sector worth more to Georgia than either construction or transportation.

But an ugly fact about the success of ag/food processing is the special role of the federal dole. By contrast, your local homebuilder, big commercial builders, the airlines, Georgia’s truckers and the rest of our builders and shippers aren’t getting direct federal support.

True, they do get indirect help, like the mortgage interest deduction, road and school construction projects, cheap fuel, deeper shipping channels and other public pushes. But those businesses all still have to duke it out in the volatile marketplace. We generally think we’re better off because such firms have to compete head on, even if some builders, truckers and airlines will fail.

That’s why it’s more than a little annoying to at-risk Georgia businesses that most of Georgia’s farming firms are subsidized by the federal government, sometimes in the form of direct payments regardless of how much they grow or what market prices are.

The federal farm bill is up for renewal this year and there’s cause to celebrate that direct payments to farm firms will probably end. The political issue on the cusp instead will be about how much federal money to devote to “crop insurance” -- heavily government subsidized guarantees that support farm business income if either yields or prices are lower than expected.

Wouldn’t builders have loved heavily subsidized “structure insurance” in the last few years, guaranteeing them good income even when housing prices sunk? We wouldn’t have considered such a thing for builders, so it’s amazing that the federal government annually gives such subsidies to farm firms, even in good years.

Could Georgia farmers afford to lose their farm subsidies cold turkey?

Yes. Four of Georgia’s top five biggest grossing agricultural commodities in 2011 were cotton, eggs, peanuts and timber. But those four farm-tastic causes for Georgia’s economic delight weren’t the biggest causes for celebration. What’s that monster category so large it’s more than twice as big as all of Georgia’s cotton, eggs, peanuts and timber put together? (Hint: it’s not turkey, peaches or pecans.)

The answer is ... chicken! “Eat mor chikin,” please. Georgia is the sixth largest chicken-producing area in the world, and the largest chicken-producing state in the United States.

So why is that important? Georgia’s world-class success in chicken growing and processing, free from the federal support of direct payments and crop insurance, suggests that Georgia’s farmers can grow a booming agri-business largely without federal governmental intervention. The same is true for Georgia’s egg and timber businesses, which are also basically unsupported by government.

Besides the issue of direct public costs, there are other reasons to beware farm subsidies. Our federal farm bills over the years have left us with bad side effects on the limited varieties, characteristics, volumes and prices of the food we have available, not to mention bad side effects on our waistlines. Because of federal incentives, our farmers are growing mass quantities of a few crops, or just not growing at all.

That keeps variety, price and quantities of food under firm federal control and skews affordable choices toward cheap junk. No wonder kids and superintendents alike don’t really want to eat school lunches stuffed full of soybean, wheat, peanut and rice byproducts. There may be plenty on the plate, but it’s mostly yucky.

All federal regulation is not bad. If you’ve ever visited a chicken house or processing plant, you know we need better regulation of conditions there. Government has an as-yet-unfulfilled role to play in making the chicken business cleaner, healthier and more humane, and Georgia as the biggest producing state should be the prime pace-setter in state-of-the-art chicken regulation. Until then, local hero Chick-fil-A might fairly be vulnerable to attack by a competitor advertising 3-D images of ragged, sun-deprived, suffocating and arsenic-addled chickens, clucking smartly about how disturbing the chicken business has become.

I’m not defending the free market as invariably acting in the best interests of the consuming public. Nor do I suggest that all federal subsidies are bad. Federal funding for agricultural research makes sense because farmers themselves are not oriented toward cutting-edge agri-science. It’s probably more efficient for government to supervise such research.

I am saying that we no longer need the kind of federal government subsidies to producers that are now wildly skewing the free market in food choice. Why should the federal government single out for financial favoritism a few particular crops like cotton, peanuts, soybeans, wheat and rice, and the big farming firms that tend to dominate those crops? About 84 percent of our farms are basically owned and operated by agri-businesses, even if such firms can still purport to have a few “family” ties.

Although we do need some federal controls over agriculture and federal support for research, we also need to quit the pork-barrel process of subsidizing particular agricultural commodities and the well-fed farming firms that grow most of them.

We need to stop government from pushing more junk onto our dinner plates and into our McDonald’s bags. We need to learn how to say no to the corporate farm lobby, and yes to the local farmers and nimble big firms growing specialty crops who want a fairer chance to compete.

What we eat and what is grown should be private decisions, not big government “suggestions” concocted by lobbyists. It’s time to end the feeding frenzy that makes up so much of the farm bill.

David Oedel eats, thanks to a paycheck from Mercer University Law School, where he is a professor of law. Last year, he studied, taught and lectured in China during two China tours about the denationalization of economic sectors, including the agriculture and food processing sectors.

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