Living Off the Fat of Washington If Trump is going to ‘drain the swamp,’ he might start with wasteful ag subsidies. By James Bovard

Posted By on December 12th, 2016

http://www.wsj.com/articles/living-off-the-fat-of-washington-1481491337

President-elect Donald Trump’s vow to “drain the swamp” in Washington could begin with the Agriculture Department. Federal aid to farmers is forecast by the Congressional Budget Office to soar to $19 billion in 2017. Farmers will receive twice as much of their income from handouts (25%) this year as they did in 2013, according to the USDA. Whoever Mr. Trump names as his agriculture secretary should target wasteful farm programs for spending cuts.

Here are a few of the most egregious examples:

• Cotton. Incredibly, the U.S. government has paid $750 million to subsidize Brazilian cotton production since 2010. This is the result of a 2002 World Trade Organization complaint brought by the Brazilian government claiming that the U.S. unfairly subsidized cotton producers and depressed world cotton prices. The WTO justifiably ruled against the United States. To deter Brazil from imposing penalty tariffs on U.S. exports, the U.S. paid a king’s ransom to Brazil so it could perpetuate handouts to American farmers.

 The federal cotton program was revised in 2014, but farmers continue reaping roughly $1.5 billion a year in aid—more than 40% of the market value of U.S. cotton production, according to a 2015 study by the International Center for Trade and Sustainable Development. The same study estimated that the U.S. program suppresses world cotton prices by up to 7%, costing foreign cotton growers up to $3 billion a year.

• Sugar. 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’s 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.

• Peanuts. In 2002 Congress abolished the quota system that required farmers to possess a federal license to grow peanuts. Yet rather than trust free markets, Congress created a new price-support program. In 2014 Congress sharply increased peanut subsidies. Federal peanut outlays are forecast by the USDA to increase eightfold between 2015 and 2017, reaching almost $1 billion a year. As a result, the USDA is drowning in a sea of surplus peanuts that farmers dump on the government. CONTINUE AT SITE

Categorized under: NATIONAL NEWS & OPINION.
Tagged with: no tags.

Comments are closed.