Are ag subsidies good politics? Or, are they political suicide? The answer is that they are probably some of both.
Farmers in the South see drastic reduction or elimination of subsidies for cotton and Southern row crops as the death knell for Southern agriculture. The age old adage that the Republicans have good policy for everything, but agriculture continues to prove itself.
We now have the president's budget proposal seeking to limit payments to mostly Southern agriculture to levels below those in the 2002 farm bill. Government press releases claim farmers don't need subsidies since crops have been so good in the last couple of years. Southern farmers say that at best, even with good yields, they just break even. What profit there is comes from the limited government payments they receive. Populist Midwestern themes championed by Sen. Charles Grassly (R-Iowa) and others claim that most government subsidies go to a small percentage of large company farmers. Most of these happen to be in the South.
They fail to note, however, that the equipment and input costs of cotton, peanuts and other Southern crops are considerably higher than in the Midwest and thus require operating on a larger scale than the 200-300 acre family farm of the Midwest.
Responding to foreign and domestic pressures, the old quota system for peanuts and currently tobacco have been - or are in the process of being - eliminated. In the overall scheme of things, this was a move by necessity. With populist pressure pitting land owners versus growers, sustaining a peanut quota system could not be supported. Though there is still much argument on the values assigned to the quota, peanut quota holders were at least recompensed to some degree. Had the program been pushed much longer the risk would have increased to do away with the program with no recompense.
As for tobacco, farmer quota holders probably are lucky to obtain the “buy out” that they did. Bad publicity and proven health risks would eventually have forced the government to eliminate its support. Elimination of the two programs was probably inevitable for the long term.
With southern farming on the edge, removing or drastically reducing the remaining government supports risks damaging overall ag viability beyond repair. If such does occur, political repercussions are sure to affect “red” states in the South, long the bastion for conservative national political candidates. A balance needs to be struck which will sustain southern crop production, yet one which does not appear to favor inefficient production.
The public needs to urge to the politicians in Washington to be extremely careful in accepting “money saving” measures which could have drastic consequences on Southern agriculture.