Should Congress Cut Farm Subsidies? Agriculture Is Already Suffering Effects of Unfair Reductions

Article excerpt

American agriculture is once again on the chopping block as Washington prepares to renew its decade-long attack on federal farm programs. As members of Congress sharpen their budget axes for another swing at agriculture, they might pause to consider the sacrifices the industry has already made at the altar of deficit reduction.

Federal farm programs administered by the Department of Agriculture's Commodity Credit Corp. have long been a favorite target for budget cutters in Washington. Though these programs account for less than 1 percent of the federal budget, that has not stopped Washington from slashing farm program spending by two-thirds since 1986. By contrast, total federal spending during this same period increased by approximately 50 percent.

This trend shows no signs of stopping. The Congressional Budget Office projects that spending by the Commodity Credit Corp. will decline by 8 percent (to $7.8 billion in fiscal 2000 from $8.5 billion in fiscal 1996) with no program changes. Worse, CCC spending would drop by 27 percent (to $6.2 billion in fiscal 2000) if proportional glide-path reductions to a balanced budget were applied to all budget items except Social Security, defense and debt service.

But the unkindest cuts of all could come later this year if Congress decides to reduce commodity target prices by 3 percent a year, as some in Congress have suggested. Three percent does not sound like much, but these reductions would be compounded annually. That would mean that CCC spending would be slashed by more than 70 percent - all the way down to $2.5 billion - by the turn of the century. Even greater spending reductions could be required if Congress were to pass a budget measure with large tax cuts.

Ironically, as America's farmers continue to contribute to deficit reduction, total federal spending will continue to increase, even under various proposals to reduce the federal deficit. If other federal programs had taken the same level of cuts over the past decade, the United States would be rolling in a substantial budget surplus.

With this in mind, the Clinton administration and Congress should apply a fairness test to budget decisions and stop counting on agriculture to balance the budget. …