War profiteers at work

Lawrence Solomon
National Post
October 9, 2001

The war has begun and the profiteers are at work, parlaying the tragedy of Sept. 11 into lucre for their pocketbooks. The penny-ante profiteers, like the gas station operators that preyed on public fears and jacked up pump prices to US$5 a gallon, have already been shamed into repaying their ill-gotten gains. The big-time profiteers don’t shame so easily.

In past wars, the big winners were the arms dealers and other suppliers to the military. This time around, the big-time profiteers don’t supply the government. They sponge off the government. At the head of the sponge line are the United States’ farmers.

Prior to Sept. 11, farmers expected slim pickings from the public purse. Because Americans didn’t want to raid their Medicare or Social Security funds to provide pork to farmers, the Agriculture Committee’s ranking member in the House of Representatives, Charles Stenholm, reluctantly conceded that hopes for a big farm-subsidy package were “dead.”

A few days later, terrorists struck the World Trade Center and the Pentagon, and a savvy Mr. Stenholm decided the time was right for him to strike, too. The “need for a new agriculture policy … may have been enhanced,” he decided, setting to work to convince his fellow legislators that Sept. 11 makes agriculture funding a priority. The farm lobbies smell victory, too. “We’re just going all out trying to line up votes,” said Bob Stallman, president of the largest farm lobby, the American Farm Bureau Federation. In the wake of the tragedy, Mr. Stallman and his farm friends in Congress are seeking a 75% increase in farm subsidies.

Mr. Stallman and other lobbyists claim that their resuscitated bill – the Farm Security Act – will enhance the United States’ food self-sufficiency. They were making this claim prior to Sept. 11, too. “This is going to be an issue for all Americans,” Senator Blanche Lincoln of Arkansas had told The New York Times. “Do we want to support American agriculture and ensure our food security and independence, or do we want to lose control eventually to the global marketplace as we have with our energy policy?”

After Sept. 11, her words seemed to take on new significance. But they are a fraud. The United States has no food security concerns – it is an immense food exporter.

The subsidies, which mostly go to wheat and other low-value export crops, do affect global food security, but for the worse. By flooding world markets with subsidized grain, U.S. farmers wreck international food markets and help put farmers in poor countries, who can’t compete against the United States’ cheap exports, out of business. Instead of feeding themselves, many of these countries instead become food importers or rely on food aid. With their economies undermined, local democracy is stunted and the poor countries’ often despotic rulers – who control aid distribution – become strengthened. Higher subsidies for U.S. farmers would only increase the size of U.S. exports and undermine poor countries further.

The profiteering U.S. farmer harms global security another way, too. The money the farmers are clamouring for competes with, and compromises, funding for the United States’ legitimate security concerns. Little wonder that Senator Richard Lugar, a leading member of the Senate’s Agriculture Committee, deplores the rush to pass a farm bill as “irresponsible,” adding, “To imply somehow we need a farm bill in order to feed our troops, to defend our nation, is ridiculous.”

The Farm Security Act is not about the welfare of America’s troops. It is about the welfare of middle-class farmers, particularly a handful of big farmers who grab the lion’s share of the benefits. Last year, 10% of farmers received 61% of the US$32.2-billion in subsides. For the five-year period ending in 2000, one-third of the US$71.5-billion that the federal government paid in subsidies went to the largest 2% of farms. The top 1% received an average of US$112,000 per year while the bottom 80% received an average of $1,200 per year.

Not that the average U.S. farmer is disadvantaged. With an average household income of $64,000 in 1999, farm households came in 17% higher than the average U.S. household. The average income of the households which own large farms, which get the lion’s share of the subsidies, exceeded $135,000 a year, $41,000 of which was subsidy. Amazingly, many of the legislators in farm states who argue for and pass the bills are farmers themselves who, in the process, line their own pockets. Ms. Lincoln’s family farm, for example, received US$351,000 over the last five years.

Aircraft manufacturers such as Boeing, which in past wars profited by selling bombers and other military aircraft to the armed forces, saw no silver lining to the clouds of Sept. 11. Because it stands to lose far more business in civilian aircraft than it can ever hope to earn in military aircraft, Boeing’s stock plummeted, as did that of most other manufacturers in the aircraft industry. Boeing also announced it would need to lay off between 20,000 and 30,000 workers. The economic carnage in New York and throughout the country is immense, and although some industries, and some workers, will be receiving federal aid, that aid will not leave them whole. Many Americans are coming together at this time to relieve the suffering, and making sacrifices of their own to help victims of terrorism. Only one large group seeks to turn Sept. 11 into a windfall: flag-waving American farmers.

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