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Farm Subsidy System Fell Victim to "Mission Creep"

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The original article by Allen Kime (A.O. Kime) appearing in the Arizona Range News on July 3, 1996

arrow a conditional 'free-to-reprint' article (see below)

Farm Subsidy System Fell Victim to "Mission Creep"
by Allen Kime (Kime & Associates)

For years attention has been focused on the farm subsidy system, while many call it welfare, the new obtrusive and illusional 1996 farm bill call subsidies ‘market transition payments’ but neither term is an encompassing characterization. Like many government programs, the farm subsidy system fell victim to ‘mission creep’.

During the Great Depression the original intent may have been noble but utilizing Fabian socialist principals, subsidies have since existed only to maximize foreign trade, sacrificing all but giant mega-farms as their key to success. It has worked, from a peak of 6-1/2 million farms in 1935, 5-1/2 million in 1950, a 1992 census counted only 1,925,300 American farms left, less than during the pre-Civil War days of 1860. Today, 25 percent of these farms account for 88 percent of production. This seven-year farm bill does little to change that trend or ‘liberate’ anything, as ballyhooed.

Subsidized agricultural exports funded by ‘Export Enhancement’ (EE) payments and direct farmer payments still exist but contrary to public belief, has not been a profitable proposition for most American farmers and will continue to be the root cause for his financial straits. Paradoxically, farmers are being paid to go broke. Farm programs have bequeathed family farmers the shaft of the century for an Orwellian society.

As the foundation of America’s export policy, subsidies have multi-purpose objective which have far-reaching implications. For a reason, farm subsidies cover commodities like feed grains, wheat, rice, oilseeds, and cotton. They are produced and consumed in large quantities, easily shipped, non-perishable and represent, in value, a huge chunk of America’s $40-$50 billion annual farm exports. Wool, sugar, milk, tobacco and peanuts are subsidized also but for purposes not addressed here, two of which for devious reasons. No fruits, vegetables or specialty crops are subsidized mainly because comparatively little was exported until recently.

The Department of Agriculture has a particular interest in subsidizing major crops that can be cheaply and massively exported. Years ago, it was recognized that America's farming potential could have a huge effect on our balance of trade with other countries. The possibilities were overwhelming and so, by design, that has been the case. This bureaucracy was charged with the responsibility to assure an abundance of these crops, attainable by subsidized overproduction. With a glut, each could be sold cheap enough to compete worldwide. Unfortunately when subsidy payments are inadequate, farmers in effect, not the government, are doing the subsidizing as evidenced his huge debt (losses) and declining numbers.

We have to understand that exports, of any kind, are critical to any government to balance their trade otherwise at risk of becoming a second-rate economic power. A country must sell something (export) to offset its buying (import) habit. That creates a problem however, although supply and demand works within a free enterprise system, to achieve a desired level of exports, market forces must often be manipulated. In many cases, but not all, it becomes necessary to subsidize products for export to compete against rival exporters with lower production costs. Exporters with higher production costs, like America, must subsidize more often to compete but subsidies, by its very nature, simultaneously destroys the very tenets of free enterprise (supply and demand) within its borders by creating overproduction, upsetting the domestic supply/demand balance.

The dynamics of world-trade and the long-term economic effects on national interests is a complex blend of power, politics and money. The aspirations of world-trade advocates have made it complex but otherwise it would be inherently simple. World-trade aspirations aside, export-poor nations have a choice, either import less or continue (somehow) to export products of roughly equal value. In order for America to neutralize its massive trade deficit, there are few equal alternatives but to export (subsidize) agricultural products.

Pragmatically, perhaps that logic should be reassessed. Since we don't really need most imported products (textiles, autos, etc.) maybe not even oil, do we still want to import them anyway? Well, as long as the logic to import products (we don't need) prevails and socialism reigns, then the American farmer should get fair subsidies, as the European Union provides, not token subsidies. The EU subsidizes their farmers three times more and enhances (subsidizes) exports six fold. When our government subsidizes farmers (albeit token), foreign customers benefit, estimated receiving 40 percent benefit of the subsidy value.

This is a callous and dangerous game America is playing (for some reason), we keep importing foreign products and by doing so, export American jobs and destroy American farmers. Congress repeatedly extends the life of dreadful farm programs just for foreign trade's sake it seems. The farmer, in any case, should not be America's whipping boy for our import appetite, either our government should subsidize fairly or get out of the farm business, but they won't. During the farm bill debate, Senate panelists voted 9-2 to insist on extending 1949 legislation, the 'permanent' authority to implement new farm programs. However, non-subsidized farm products have made the biggest gains in recent years, pork exports up tenfold since 1986, poultry up 700 percent, beef has quadrupled. A Congressional Research Service study indicated that 70-90 percent of the wheat sold under EE subsidy was unnecessary.

Although American farmers aren't 'forced' to grow subsidized crops, they often have no choice as few options are available when our government is involved in the majority of major crops. Even with our massive agricultural exports, grown at bargain basement prices, America is still losing the trade game. In 1973 (OPEC embargo), our decades-long monthly trade surplus ended and every month since, imports have exceeded exports in billions. Farmers therefore are being butchered in vain but by whose decree should they be butchered at all?

Consumers should consider the real price tag of that imported product, it may be priced cheaper but with the 8-10 billion the USDA spends on subsidies annually, that and the destruction of 297,000 farmers this last decade should be factored in. How much cheaper then, if any, are imports really?

It should be incumbent upon government, if they must impose socialism on agriculture, to provide protected orderly markets with parity agreements. However our negotiators dismiss the parity concept and recently failed to effectively 'protect' farmers in the 1995 GATT 'Uruguay Round' just as they failed in the 'Tokyo Round' in 1973, even though it was billed in advance as 'the farmers turn'. The Tokyo result was American grain farmers received no relief while in contrast, American industrialists received tariff cuts averaging 46 percent from Japan and 34 percent from the European community.

Without providing protection, subsidized farm exports should cease. Exports would be sharply reduced but many farmers could still compete worldwide on many crops, depending on the farm size, region and/or expertise but many possibly cannot. Why destroy then, with subsidies, the domestic markets to maintain lousy export markets? We should eliminate subsidies and allow world market niches to develop on their own, as they have. Meanwhile, interested farmers could export at world prices but to avoid domestic gluts, export acreage (under contract) is designated. This ‘supply’, not being intermingled, should not affect domestic prices. Worldwide production costs will always vary, as it does within America, wheat in the Midwest (rain) can be grown much cheaper than on irrigated farms in the West.

Besides the 'ideology of parity' being consistently spurned, considered 'anti-market oriented' (true) yet contrary to the spirit of GATT and their self-professed 'market-force ideology', our bureaucrats increased our EE funding budget to almost 1 billion (up 159 million), necessary they claim, as a 'bargaining chip'. Perhaps, but maybe it was ‘export addiction syndrome’. Meanwhile, we are still then forcing exports without parity or any farmer-friendly trade agreements to accommodate imports at a terrible loss in farmers and jobs.

Production costs (wages) between nations is simply too diverse in many cases to force (fair) trade on everything, possibly for decades to come. Incredibly, our chronic trade deficit hit $166 billion in 1994 and is still growing, largely due to Communist China and Japan ($96 billion), neither of whom honor trade agreements. Atop of that, America’s debt is $2.1 trillion, although labeled the ‘budget deficit’, simple calculations indicate most of this $2,100.000,000,000 debt came from trade deficits, creatively ‘lumped’ to mask the true accumulated trade deficit.

Congress recently considered a ‘balanced budget amendment’, why not a ‘balanced trade amendment’ with subsidies outlawed? Americans, with a 229-year investment in blood, sweat and tears, should not allow the mutilation and squandering of the American dream through excessive imports to fulfill the aspirations of non-elected conspirators. On the cusp of being outsmarted, our foreign trade policy is immersed in deception; it is greed-driven and powerfully destructive. America’s trade deficit is a good indication we are headed for a tyrannical outcome or absolute idiots are in charge.

If world-trade continues unfettered due to industrial greed, power broker, PAC and think-tank lobbing influences, the obituary of the American dream will surely read 'death by proxy'. Americans will (eventually) prove to have no forbearance for any such meddling as attempting to capitulate the American system for another. We cannot and must not allow this, at all costs. Our founding fathers did not fathom (or guard against) the repercussions of massive world-trade and it is imperative laws be passed now to forbid power groups from imposing their will on America's future. Thomas Jefferson said "A little rebellion, now and then, is a good thing and as necessary as storms in the physical".

America's worst enemy isn't Islam, ISIS, Iran or North Korea... so full of traitors and conspirators it is Congress See A.O. Kime's article about treason

Since the greatness of American agriculture empowered their dreams of an import heaven, eliminating farm programs can destroy that notion. Massive (unnecessary) imports from low-wage countries (made possible by cheap agricultural exports) is the culprit, the underpinning and power source of these Orwellian conspirators, without which they cannot succeed. Their ultimate scheme (one-world government) would be the most diabolical threat to freedom mankind has ever faced, another tyrannical Rome but much, much bigger, stronger, and possibly then (no place to hide) invincible. That horrid scenario is made possible by and only by, American agriculture.

Allen Kime (family farmer for 25 years)

Resource Box: © A.O. Kime (2003)
A.O. Kime is the author of two books plus 70+ articles on ancient history,
spiritual phenomena, political issues, social issues and agriculture which
can be seen at http://www.matrixbookstore.biz

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Last modified: 02/09/16