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Yes, There Are Millionaire Welfare Farmers

November 10, 2008

This look at how millionaire farmers get welfare is the third in my series on wealth redistribution from the poor and middle class to the rich. It’s one of the more offensive examples of some rich people getting richer off the backs of working people. By the way, if you missed the first two posts in this series, you can find them here: How The Rich Get Richer and A Bailout For The Rich. Also, I am collecting all posts and pages on this topic here: The Redistribution Of Wealth To The Wealthy.

The U.S. government doles out about 18 billion per year in farm subsidies (it varies from year to year). When President Bush tried to limit the subsidies to those who made less than $200,000 per year, Mary Kay Thatcher, a lobbyist with the American Farm Bureau Federation, complained that the new law would affect 75,000 farmers. Notice that this means 75,000 farmers are making more than $200,000 and still getting handouts from the rest of us.

They use every sort of excuse for these programs, but lets forget those for the moment (The reasons are mostly bogus, but would take another post or two to refute). Let’s look at the actual effects. Millions of citizens who make less than $200,000 annually are taxed to enrich those who make more than them. This is wealth redistribution, a reverse-robin hood scheme.

But the poor who are the most hurt by this scam are not found in this country. They are the poor farmers in other countries whose livelihood is destroyed by the depressed prices resulting from subsidized agriculture in wealthy countries. For years India has had a suicide epidemic among farmers, and especially among cotton growers who are going bankrupt. The huge subsidies here that lower cotton prices are one of the reasons for this. Cotton growers here are second after grain farmers in terms of money doled out to them, receiving an average of $156,000 each in 2006.

In some countries cheaper subsidized grain has left the poor almost entirely dependent on food from outsiders. It isn’t hard to understand. Any industry in any country can be destroyed if a wealthier government shovels enough money into driving down the price of the products in that industry. Why would a country’s people buy corn from local farmers if U.S. corn is cheaper? And when the corn growers there are gone and the U.S. encourages bio-fuels that result in a tripling of the price of corn, what choice do those people have but to pay that price?

The sad thing is that agriculture is one key area where developing countries can normally compete with wealthier countries, due to cheaper land and labor. Unfortunately low crop prices resulting from subsidies encourage them to be dependent buyers of food from wealthy countries. So we take from the working class in the U.S. to enrich wealthy farmers who then destroy poor farmers in other countries. Remember, this has nothing to do with free and fair trade. It is the use of political power to transfer wealth from poor to rich. And you thought Republicans weren’t redistributionists?

Of course some of this agricultural welfare goes to average farmers too (although the richest 1 per cent of farmers got 72 per cent of the government payouts in one recent survey). The average farm household makes over $75,000 though. To suicidal farmers in India whose businesses are being destroyed, that’s wealthy. Even most of the people who pay for those farmers’ welfare checks make less than that.

Millionaire welfare farmers are one more example of how money becomes political power which is then used to redistribute wealth from poor and middle class to the rich. The rich become richer, and sometimes it isn’t by honest efforts. If we don’t stop this nonsense the people will someday revolt and almost certainly ask for more socialist policies to correct the obvious corruption they see. That would be tragic, because it is free markets and honest capitalism that can end poverty.

Note: This is part of a series. You can find all of the pages listed and linked to here:

The Redistribution of Wealth to the Wealthy

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Welfare Farmers