Friday, February 13, 2015

Farm Subsidies back in the news

A new article from The Economist, titled Milking taxpayers, reintroduces a complex subject: the exploitation of farm subsidies graphically depicted to be wealthy individuals or organizations, the mismanagement of subsidy payouts, and peculiar cost saving measures implemented by the US Department of Agriculture (USDA). The article touches on improper payouts by the government to farmers that did grow any crops and payments to deceased farmers. The cost for these payouts both correct and incorrect amount to $20 billion and it is stated that most is directed to, "...big, rich farmers producing staple commodities such as corn and soyabeans in states such as Iowa." Unfortunately political clout of farmers creates an environment that stifles reform on the subject. Congress addressed the problem in 2014 by passing a reform bill to modify the payout system and cut cost to the program. Part of the savings came from cuts to the food assistance program for needy families, an untoward byproduct of the USDA administering said program. The new, modified payout system links subsidy payments to commodity prices and output. The newest forecast by the USDA predicts a decline in farm income resulting in increased compensation to farmers. Taxes pay for the program hence taxes will be affected somehow. This has far reaching implications to the general public and the government. Unless the public demands better reform from politicians the expensive tax burden will continue, favoring many well positioned people and disadvantaging those in need. The article is interesting and should be given attention, it can be found here, http://www.economist.com/news/united-states/21643191-crop-prices-fall-farmers-grow-subsidies-instead-milking-taxpayers and supporting material here, http://frac.org/leg-act-center/farm-bill-2012/ and https://www.congress.gov/113/bills/hr2642/BILLS-113hr2642enr.pdf.

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