Vol. 72/No. 5      February 4, 2008

The Senate bill includes a $10 billion increase for the next five years. It increases crop subsidies, creates grants for fruit and vegetable growers, and provides money for biofuel production and “green” payments to farmers, among its many provisions.

The big-business press reports that Bush will veto the bill unless farm subsidies are cut substantially, and that he opposes raising the taxes to cover their costs. Whatever the final version, farm subsidies will continue to flow to the largest capitalist farmers, as they have for decades.

Debate over the farm bill takes place against a backdrop of rising agricultural commodity prices. Much of the increase has been fueled by the ethanol and biodiesel boom, which has pushed up prices of corn, soybeans, and other foods. The recently passed energy bill, which requires refineries to use more and more ethanol, is also contributing to higher prices.

Federal farm legislation has long been marked by billions of dollars in subsidy payments to rich non-farmers and big capitalist farmers. According to the Reuters news agency, “8 percent of grain, cotton, and soybean growers collect 58 percent of the payments.” Even though the price of corn, wheat, cotton, and soybeans are at record highs, these big producers will get the lion’s share of the subsidies. For example, the price of corn went from $2 to more than $4 a bushel in the past year. The price of wheat, which was $3 to $4 a bushel, shot up to around $9 during the same period.  
 
USDA study
A 2005 U.S. Department of Agriculture (USDA) study, “Structure and Finances of U.S. Farms,” reported that “medium-sales farms and large-scale farms received about three-quarters of commodity-related government payments in 2003.” This means farmers with larger sales benefit the most, not the farmers who need help the most. These farmers are forced to rely more and more on off-farm income to survive.

The report also said, “Average operating profit margins and average rates of return on assets and equity are negative for small farms, but positive for large, very large, and nonfamily farms,” said the report. Farm subsidy programs contribute to farm consolidation and higher land prices, making it more difficult for working farmers to stay on the land, and even more difficult for younger farmers to begin farming.

The demand for corn to produce ethanol has led to inflated food prices. Corn serves as the main feed for meat, poultry, dairy, and egg production, and for an array of processed foods.

The current prices of crops, along with federal subsidies and incentives for corn-based energy, have motivated farmers to plant more corn. The Washington Post reported December 12 that “since 2000, the share of the U.S. corn crop devoted to ethanol production has jumped from about 6 percent to about 25 percent.”

Producers of gasoline receive a 51-cent tax credit on every gallon of ethanol they mix with their gasoline. The government paid out more than $500 million to ethanol refiners between 2001 and 2006. What’s more, the new energy bill calls for doubling the federal requirement of ethanol use.  
 
‘Critical food shortages’
Higher food costs are hitting the semicolonial world with a vengeance. For example, the biofuel boom and rapacious U.S. farm policies caused a spike in tortilla prices in Mexico, which was met with large street protests in early 2007. A UN report said that “the cost of imported food for the world’s poorest countries has risen by 25 percent.” Some 40 countries face “critical food shortages,” the report added.

The price of U.S. farmland is up, too. In Iowa farmland values have risen 22 percent in the past year to an average of $3,908 an acre, the largest one-year increase since 1976. Nationally, farmland prices have skyrocketed 50 percent over the past three years, to an average of close to $2,200 an acre, according to the U.S. Department of Agriculture.

Iowa State University economist Michael Duffy said ethanol production would be strong for years, telling the Des Moines Register, “I don’t see anything that can cause a downturn.” Others are not so sure. Many farmers in the upper Midwest remember previous bubbles, like the one in the early 1980s. When it burst, farmland prices fell through the floor, driving tens of thousands of working farmers off the land.  
 
Cost of renting land soars
Higher land prices may help those who own land, but not those who rent it, such as Randy Jasper, a grain farmer in Wisconsin. Jasper said in an interview that “the good land I rent has doubled from $100 to $200 an acre, while the poor ground, which is less productive, has tripled in price from $40 to $120 per acre.” Jasper rents most of his 2,000 acres of land.

With higher prices for fuel, fertilizer, and seeds, the overall cost of farming almost doubled in the last five years, he said. “The farm bill represents no change. The big farmers get most of the subsidies and big corporate farmers get around the subsidy limits.”

George Naylor, president of the National Family Farm Coalition, noted in a December 11 interview on National Public Radio that he received $6,000 last year in farm subsidies. Naylor is a corn and soybean farmer in Iowa. In 2005 he received $23,000, which was more than half his income.

“The cost of farming doubled in the last five years,” Naylor said. To get by, he, like many working farmers, has to rely on off-farm income to make ends meet.

Like Jasper, Naylor says increasing numbers of farmers are forced to rent their land, often from several landlords. Beside higher fuel costs, farmers like himself are also being squeezed by higher prices for farm inputs—everything from fertilizers, pesticides, and seeds to storage and crop insurance.

There is little to gain for working farmers from the farm bill. The reality is that more and more farmers continue to be forced off the land. The Des Moines Register recently reported that there were 99,000 Iowa farms in 1996. In 2006 the total had fallen to 88,600—a loss of more than 10,000 farms.

Frank Forrestal is the Socialist Workers candidate for U.S. Congress in Iowa’s 3rd District. Rollande Girard is the Socialist Workers candidate for State Representative in Minnesota’s District 61B.

Carlos Samaniego contributed to this article.  
 
 
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