Isn’t it ironic? The same day I get details of the Bush Administration’s 2006 budget proposal, which includes a 10 percent reduction in farm program spending, I also get a release from the American Farm Bureau noting what a value U.S. consumers have in their grocery stores.
The Farm Bureau release points out that by early February most Americans have earned enough money to pay for all the food they’ll eat in a year. Many Farm Bureau members are celebrating that fact by donating food to Ronald McDonald Houses or other worthy charities across the country.
A Farm Bureau spokesperson points out that America’s farmers provide the most bountiful, safe and affordable food supply in the world, allowing Americans to spend only 10 percent of their disposable incomes for food.
That’s why they can earn almost enough by Ground Hog Day to carry them through New Year’s Eve. It takes only about 37 days, according to Farm Bureau, for the average American to earn enough to buy groceries for the entire year.
“The decrease in percentage of income used for food purchases is especially notable since trends indicate Americans are buying more expensive convenience food items for preparation at home, as well as more food away from home,” the report says.
Now for the irony. One reason consumers get such a deal on groceries is that farmers have absorbed much of the production costs that other manufacturers just pass along to end users. When steel goes up, so does the price of an automobile. When the cost for whatever one uses to make widgets increases, we have to pay more for all our widgets.
When the price of fertilizer or diesel or that same load of steel used to make SUVs goes up, farmers take their commodities to market and accept whatever they can get for them.
The luxury of passing along the added overhead to the hungry masses does not apply. The saving grace for America’s farmers, for generations, has been their ability to increase production and improve efficiency. Sometimes that means getting bigger and taking advantage of the economy of scale. They also take bigger risks.
The U.S. farm program plays an important role, too, providing a safety net that helps farmers survive when prices fall or when calamity strikes. That safety net could be weakened by severe cuts in the agriculture budget. Payment limitations, especially hard on farmers who have expanded to improve efficiency, hamper producers’ abilities to make a profit.
Most farmers, probably 99.99 percent, prefer to get their incomes from the marketplace. If the world were an equal opportunity market, where every agricultural competitor played by the same rules and operated under the same restrictions, U.S. agriculture would thrive. But that’s a fairly tale.
The truth is, taxpayers get a bargain from the small percentage of their contributions (one-half of one percent of the total U.S. budget) that supports agricultural programs. “Food in America remains affordable, thanks to the farmers and ranchers who produce it,” says the Farm Bureau.
The administration should rethink its proposal to take deep cuts from agriculture. It’s one of our most cost-effective and far-reaching programs.
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