Big Farm Raked In Record Profits Of Almost $100B In 2011, But They Harvested $20B From Taxpayers’ Pockets, Isn’t It Time To End This Crony Capitalism?
According to the USDA, the net income from U.S. farms set a new record last year of almost $100 billion on record cash receipts of $363 billion. The record-high farm income last year was 24% above income in 2010. The USDA is also reporting that the total value of farm real estate (and total farm equity) exceeded $2 trillion last year for the first time, and increased by 6% from the previous year. Even with record-level income, revenues and farm land values, U.S. farmers also “harvested” more than $21 billion in subsidies last year from the pockets of U.S. taxpayers, including more than $10 billion in direct government taxpayer payments according to the USDA. Next year, the USDA is forecasting another “bumper crop” of taxpayer money for wealthy U.S. farmers, who are scheduled to harvest almost $22 billion from the pockets of Americans in 2012.
Whenever oil prices and “Big Oil” profits are high, politicians call for imposing “windfall profits taxes” and ending oil subsidies (even though oil companies don’t actually get any direct government payments from taxpayers and generally only get the same tax deductions and cost recovery allowances that are available to all U.S. manufacturers), so maybe it’s time for equal treatment of Big Farm. Well, that’s not likely to happen, is it?
Farmers have been a protected political class going back to when farm subsidies started during the Great Depression, and they will apparently continue to be the recipients of crony capitalism and generous corporate welfare payments extracted coercively from the pockets of taxpayers, no matter how wealthy and profitable they become.
Mercatus Center economist Veronique de Rugy argues in today’s Washington Examiner that it’s time to end Depression-era farm subsidies, here are the opening and closing paragraphs:
“Cronyism is the practice by which government officials provide preferential treatment (such as loans, subsidies or regulatory preferences) to handpicked firms or industries. It is a bipartisan practice, as we may once again find out if lawmakers reauthorize most of the farm bill currently moving through Congress. There is no justification for extending our current regime of agricultural subsidies — a clear example of cronyism.