Urban Renaissance Institute

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.

Lawrence Solomon
National Post
September 11, 2001

One hundred years ago and more, lured by free lands and wild-eyed visions of prosperity, pioneers were duped into settling the Prairies. Many quit as soon as they realized their mistake, never to return. The rest, through their offspring, got their revenge.

For decades, Prairie farmers have been extracting payments from a gullible public that believed that the plight of the Prairie farmer was temporary. It isn’t. The Prairies cannot support a large farming population, and never could. Canadians who believe otherwise are being duped, as surely as those early Prairie pioneers were duped.

Before Saskatchewan became a province, before Canada became a country, the area we know as the Prairies went by another name: The Great American Desert. This semi-arid area extended from the Rio Grande in the south to the delta of the Mackenzie River in the north. Since recorded time, this area has received too little rainfall – about half that necessary – to consistently support agriculture.

Early pioneers turned back when they reached the Great American Desert. The summers were too hot, the winters too cold, the rainfall too unpredictable, to provide a decent living. Then governments decided to open up the West. Because railroad companies refused to build uneconomic lines across the desert, governments plied them with financing and vast landholdings to sell to settlers. The railway companies built the lines, and set about marketing their lands.

The Great American Desert was re-branded; its name would soon be forgotten. In both the United States and Canada, railways obtained large land grants and government encouragement to market them aggressively. They did so for decades, making wild claims about the climate and the agricultural potential of the Prairies well into the 20th century. Luckily for the railroads, few harsh droughts struck during their marketing efforts.

Told that the land was fertile and the water plentiful, Europeans crossed the oceans in droves and Americans flocked north. Stephen Leacock, the economist-historian from McGill University, described the times in his history, Canada: The Foundations of its Future:

“‘The new century,’ said Sir Wilfrid [Laurier], ‘is Canada’s.’ It was, till the Devil took it away. Bountiful harvests and good prices drew a flood of immigrants toward the West, utterly different from any movement seen before. The new Minister of the Interior, Mr. Clifford Sifton, inaugurated a vigorous advertising campaign for immigration. Lecturers spoke at the fall fairs of the United States and visited the British Isles. Leaflets and maps were sent all over Europe; agencies opened at the ports. Imperial Germany became alarmed. ‘The attempt to lure our fellow countrymen to this desolate sub-arctic region,’ so complained Wilhelm’s Street, Berlin, to Downing Street, London, ‘is to be denounced as criminal.’ But Main Street, Winnipeg, won out. Immigrants began to move in a flood. As many as 75,000 came to the Western Provinces in 1905, 90,000 in 1906 and in the last four years before the Great War, an average of 120,000 a year.”

Canada’s publicity machine pulled out all stops. At the 1897 Diamond Jubilee, the London Canadian Arch proclaimed Free Homes for Millions, a theme repeated in posters plastered everywhere. Through its Homestead Act, the government gave all comers 160 acres, and through railroad subsidies it gave them ready transportation. The marketing campaign drew everyone from Oxford graduates to remittance men, starry-eyed all: “He saw himself already lord of a bonanza farm, reaching beyond the horizon, bending with golden grain that fell with a sigh beneath the knife of the blinder,” Leacock wrote. “He saw himself in winter affluence on the portico of a California hotel. It was a picture that called forth while it lasted all the best impulse of individual effort. It is all gone now … The boom broke. The fortunes vanished.”

The fortunes vanished, as vanish they must. The Prairies regularly succumb to drought. Prairie farmers learned that lesson well, and have since been harvesting subsidies. The rest of us have yet to understand that we’ve been attempting the impossible in expecting sustainable agriculture on the semi-arid Prairies. Not that crops can’t be grown there with enough expense – by pouring subsidies into farming the desert, even Saudi Arabia became a major exporter of wheat. But neither Saudi Arabia nor Saskatchewan has an economic rationale in growing wheat.

Last week, to help with the drought, Saskatchewan’s agriculture minister formally requested that Ottawa top up existing subsidies with up to $200-million in new money. The farm lobbies voiced instant approval. “I think he’s on the right track,” said one. Said another: “At some point the federal government needs to say the program, the normal system, won’t handle this stress.”

Yes, at some point the federal government does need to say that the normal system won’t handle growing grain in the desert. It then needs to stop perpetuating the mistake made a century ago, when government policies mistakenly overpopulated the Prairies with farmers. The federal government should recognize that it has been defying nature and stop subsidizing Prairie farmers, it should buy out Prairie farmers prepared to leave the land, and it should return the land to buffalo, Prairie grasses and wilderness.