Wednesday, December 27, 2006

The Flaw In American Representative Democracy: Hypocrisy

My last post talks about the airline industry. Here we have agriculture, and only one example at that -- rice. Dan Griswold of Cato (one of my favorite tanks) argues in favor of dropping US subsidies to rice growers.

LouisianaRicePump
[Thanks to elbertprice.com for this painting of a Louisiana rice pump.]

"What's this? Subsidies to *rice* growers? Are you sure?" you say. Yup. You heard right. "But I thought the paddies were all in Asia and other wet territories." Well, if you didn't know, we are the 10th largest grower in the world. Rice is grown in:

Texas
California
Arkansas
Louisiana
Mississippi
Missouri

Their trade organization: USA Rice Federation

How much does the taxpayer pay to the producers of US rice? "Direct taxpayer subsidies to the rice sector have averaged $1 billion a year [repeat: a year] since 1998 and are projected to average $700 million a year through 2015." This accounts for "half of all income for U.S. rice farmers" and worldwide, such subsidies represent "an incredible 77 percent of gross receipts for rice farmers in OECD [Organization for Economic Cooperation and Development] countries in 2002-04."

And to make it worse, "[r]ice payments tend to be concentrated among a small number of large producers. (Ever heard of Archer Daniels Midland, anyone? I don't know if they receive direct subsidies, but they're sure as heck a member of the above trade organization.)

Here's a funny piece of data from the Washington Post: "[T]he federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all." People like an 87-year-old Texas doctor who collected $191,000 over the last ten years, and the Texas doctor who got $490,709 for owning a piece of land near Houston that "had once been used to grow rice."

We also pay as consumers. "Tariffs on imported rice drive up prices for consumers," he says.

Plus, hear this: "Steep barriers to rice imports drive a wedge between domestic and global prices, forcing consumers in the more protected countries to pay as much as four times the world price for rice." And the other edge of the same sword: "By subsidizing production and exports and restricting imports, U.S. policy drives down [sic] global prices for rice ... [perpetuating] poverty and hardship for millions of rice farmers in developing countries...."

"In the face of falling prices through 2001, American rice farmers switched from growing for the market to growing for the government." "The rice program exists not because it serves the national interest but because the special interests that benefit from it are more organized, concentrated, and motivated than the general public that pays for the program."

WE'VE GOT TO GET ORGANIZED, PEOPLE. Our elected representatives are listening to the wrong voices, we know this; but unfortunately, they've got the persuasive element: election money -- in the 2003-04 election cycle, $289,300 to be exact -- plus all of the lobbying that goes on.

Congress is preparing to rewrite the farm bill sometime in the first half of 2007. As Griswold puts it, "The rice program is not an asset to be jealously guarded; it is a national liability to be jettisoned as soon as possible."

Hear hear. I'm trying to do my part by passing along this research.

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