And if President-Elect Trump\u2019s choice for HUD Secretary, Ben Carson, is as sound on housing issues as he is on tax issues<\/a>, presumably he will work to close down the bureaucracy that he\u2019ll soon be overseeing.<\/p>\n But I just read a Wall Street Journal<\/em> column about agriculture subsidies that has me so agitated that I may change my mind and make the Department of Agriculture my top target<\/a> for elimination. Here\u2019s some of what Jim Bovard wrote<\/a>:<\/p>\n President-elect Donald Trump\u2019s vow to \u201cdrain the swamp\u201d in Washington could begin with the Agriculture Department \u2026 Farmers will receive twice as much of their income from handouts (25%) this year as they did in 2013, according to the USDA \u2026 big farmers snare the vast majority of federal handouts. According to a report released this year by the Environmental Working Group \u2026 \u201cthe top 1 percent of farm subsidy recipients received 26 percent of subsidy payments between 1995 and 2014.\u201d The group\u2019s analysis of government farm-subsidy data also found that the \u201ctop 20 percent of subsidy recipients received 91 percent of all subsidy payments.\u201d Fifty members of the Forbes 400 list of wealthiest Americans have received farm subsidies, according to the group, including David Rockefeller Sr. and Charles Schwab.<\/p><\/blockquote>\n Indeed, agriculture subsidies are basically a huge transfer of wealth from the poor to the rich.<\/p>\n \u2026 in 2015, the median farm household had a net worth of $827,307. That includes a great many residential, gentlemen and hobby farmers. The largest class of farmers\u2014those who produce most farm products and harvest the largest share of the subsidies\u2014have a median net worth of $2,586,000. By contrast, the median net worth for American households in 2013 was $81,200, according to the Federal Reserve.<\/p><\/blockquote>\n In his column, Jim also explains some of the bizarre consequences of various specific handout programs, including the fact that American taxpayers have forked over $750 million to Brazil in order to continue huge (and impermissible, according to our trade commitments) subsidies to American cotton producers.<\/p>\n But the sugar subsidies are probably the most economically insane.<\/p>\n The U.S. maintains a regime of import quotas and price supports that drive U.S. sugar prices to double or triple the world price. Since 1997 Washington\u2019s sugar policy has zapped more than 120,000 U.S. jobs in food manufacturing, according to a 2013 study by Agralytica. More than 10 jobs have been lost in manufacturing for every remaining sugar grower in the U.S.<\/p><\/blockquote>\n Let\u2019s look at some more evidence, this time dealing with dairy subsidies.<\/p>\n Charles Lane of the Washington Post<\/em> wrote earlier this year<\/a> about America\u2019s government-caused cheese problem.<\/p>\n \u2026 as of March\u00a031, 1.19\u00a0billion pounds had accumulated in commercial cold-storage freezers across the United States, the largest stockpile ever. \u2026each American would have to eat an extra 3\u00a0pounds of cheese this year, on top of the 36\u00a0pounds we already consume per capita, to eliminate the big yellow mountain.<\/p><\/blockquote>\n Why is there something as silly as a giant stockpile of cheese?<\/p>\n If you\u2019re guessing it\u2019s the result of a foolish government policy, you\u2019d be right.<\/p>\n \u2026 the U.S. government has a long-standing pro-cheese-eating policy, which grew out of the need to do something with the subsidized excess of milk products generated by federal pro-production dairy policy\u2026 Two decades ago, in fact, the Clinton administration\u2019s Agriculture Department helped form a promotional organization, Dairy Management Inc., funded by a congressionally authorized, federally collected dues requirement for dairy producers. Its $140\u00a0million annual budget has helped develop such fast-food items as Pizza Hut\u2019s cheese-topped crust and Taco Bell\u2019s double steak quesadillas, as well as cheesy pizzas for the federal school lunch program. \u2026dairy farms are protected by a subsidized insurance program in the 2014 Farm Bill.<\/p><\/blockquote>\n What\u2019s the answer to this mess?<\/p>\n Well, even an editorial writer for the leftist Washington Post<\/em> recognizes that markets, rather than subsidies, should determine cheese production.<\/p>\n In the long run, everyone \u2014 consumers, producers, middlemen, grocers \u2014 would probably be better off if governments just left the dairy market to its own devices. And a lot of other markets, too.<\/p><\/blockquote>\n Working the System<\/strong><\/p>\n By the way, since we\u2019re on the topic of subsidies to the dairy industry, a Bloomberg<\/em> column<\/a> exposes some of the perverse consequences of government intervention.<\/p>\n \u2026 some farmers tried to limit the supply of milk by killing off their own cows. No, you read that correctly.\u00a0This mysterious state of affairs was revealed in\u00a0a nationwide\u00a0class-action lawsuit against dairy\u00a0cooperatives, groups of farmers who pool their supplies but, as a whole, serve as middlemen between the farmers\u00a0and dairy processors \u2026 The \u201cherd retirement program,\u201d as it was called, was led by Cooperatives Working Together, run by\u00a0the lobbying group National Milk Producers Federation, and supported by farms\u00a0producing almost\u00a070 percent of America\u2019s\u00a0milk \u2026 The path that leads to killing perfectly good dairy cows begins with a\u00a01922 law, the Capper-Volstead Act.\u00a0The statute was designed to protect both dairy farmers and consumers from profiteering middlemen.<\/p><\/blockquote>\n This story actually is a perfect storm of government stupidity. The federal government has programs that subsidize the dairy industry. That then leads to overproduction. Producers respond to overproduction with a plan to kill cows, which somehow triggers antitrust intervention by the government.<\/p>\n Heaven forbid we actually get the government out of the business and simply allow markets to work!<\/p>\n And if antitrust laws<\/a> and agriculture subsidies are a bad combination, then you won\u2019t be surprised to learn that foreign aid<\/a> and agriculture subsidies are another bad combination. In other words, two negatives don\u2019t make a positive, as explained<\/a> by Jim Bovard earlier this year in another column for the Wall Street Journal<\/em>.<\/p>\n The Obama administration\u2019s plan to dump a million pounds of surplus peanuts into Haiti at no cost has sparked a firestorm from humanitarian groups \u2026 Haiti has about 150,000 peanut farmers. The industry is \u201ca huge source of livelihood\u201d for up to 500,000 people, Claire Gilbert of Grassroots International told NPR, \u201cespecially women, if you include the supply chains that process the peanuts.\u201d \u2026the Peasant Movement of Papaye, denounced the peanut donation as \u201ca plan of death\u201d for the country\u2019s farmers \u2026 American aid has a sordid record. In 1979 a development consultant told a congressional committee: \u201cFarmers in Haiti are known to not even bring their crops to market the week that [food aid] is distributed since they are unable to get a fair price while whole bags of U.S. food are being sold.\u201d \u2026 After the 2010 earthquake, Haiti\u2019s president, Ren\u00e9 Pr\u00e9val, pleaded with the U.S. to \u201cstop sending food aid so that our economy can recover and create jobs.\u201d Former President Bill Clintonpublicly apologized the same year for the devastating impact of subsidized U.S. rice imports: \u201cI have to live every day with the consequences of the lost capacity to produce a rice crop in Haiti to feed those people, because of what I did.\u201d<\/p><\/blockquote>\n The peanut program may be even more inanely destructive than the sugar program.<\/p>\n The real culprit here are federal peanut programs with an almost 80-year record as one of Washington\u2019s most flagrant boondoggles. Subsidies have encouraged farmers to overproduce and then dump surplus peanuts on the USDA, which winds up stuck with hundreds of millions of pounds. That food has to go somewhere, and the department sees Haiti as the ticket. Food-aid policies have long been driven not by altruism, but by bureaucratic desperation to dispose of the evidence of failed farm policies \u2026 The cost of peanut subsidies is predicted to rise 10-fold between 2015 and next year, reaching $870 million\u2014which approaches the total farm value of the whole U.S. peanut crop itself. The USDA expects to spend up to $50 million a year to store and handle surplus peanuts, and industry experts are warning that federally-licensed warehouses might not have enough space to hold the next crop.<\/p><\/blockquote>\n Though this humorous image reminds me that ethanol handouts<\/a> also may be the most counterproductive and wasteful agriculture subsidy.<\/p>\n Agriculture subsidies are bad for taxpayer and bad for consumers. They are a corrupt transfer of unearned wealth to special interest groups.<\/p>\n P.J. O\u2019Rourke came up with the only appropriate solution<\/a> to this mess.<\/p>\n This first appeared at the author’s website<\/a>.<\/em><\/p>\n Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.<\/p>\n![\"\"](\"http:\/\/www.megalextoria.com\/wordpress\/wp-content\/uploads\/2016\/12\/agsubsidies.jpg\")
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\nDaniel J. Mitchell
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