Sept. 16, 2011, 12:00 a.m. EDT
Farm subsidies shouldn’t go to land speculators
Commentary: Farmland prices surge 17% in past year
By Thomas Kostigen
SANTA MONICA, Calif. (MarketWatch) — Farmland prices have skyrocketed 17% in the past year, according to analysis of second-quarter data quoted by the Financial Times.
Investors are flocking to hard assets and safety as the capital markets bounce around. And while this may be a boon to farmers, it isn’t for us taxpayers who still foot the subsidy bill for both farmer and, yes, investor.
The farm bill, up for renewal next year, puts billions of taxpayer dollars in direct payments into farmers’ (or investors’) hands. In fact, the majority of subsidy dollars go to the biggest and wealthiest farmers’ hands. With land prices up, these owners are even richer.
So what do we get out of this? Higher food prices. Commodity prices, including foods, are soaring right along with farmland.
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Large, corporate-run farms receive almost three-quarters of the subsidies doled out by the U.S. government. And these farms rake in millions of dollars in revenues per year. As land prices increase you can bet that many of the family-run farms left will sell out to corporate behemoths, leaving us consumers with more factory food programs to serve us.
Meanwhile, investors in farmland are getting a subsidy bonus to go along with their asset appreciation. Indeed, classified advertisements in newspapers that serve farming communities in the Midwest even advertise their subsidy grants as selling points to potential investors.
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I am all for seeing land prices increase to enrich smaller family farmers who have struggled for years on their farms. But I don’t believe subsidies should be passed along like season tickets, especially to wealthy new owners who don’t need government subsidies to begin with.
The backlash against the U.S. subsidy system, especially among Third World farmers, is too strong. Sensitivity to world trade and global agricultural developments needs to go hand in hand with new farm policy — one that addresses both farmers and investors alike. After all, they are becoming one and the same.
Full story: http://www.marketwatch.com/story/farm-subsidies-shouldnt-go-to-land-speculators-2011-09-16
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