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Senate Continues to Support Big Corporate Welfare Pork
As It Passes the Farm Bill

For Immediate Release. May 9, 2002Once again Washington has put politics ahead of what is best for America and tragically continues to advance big government corporate welfare programs.  Incumbents look for different ways to attract voters in favor of them by passing big government pork legislation that is targeted to regional special interest at the expensive of the rest of the nation. And, as a result, the American taxpayers’ pocketbooks are once again burdened with the Senate’s passage of a protectionist agriculture bill, the most expensive in U.S. history.  These efforts will result in the demise of more family-owned farms (the backbone of American agriculture for hundreds of years) as well as an increase in taxes and food prices, putting an undue burden on the poor Americans that every politician always tries to say he is trying to help.

The very design of farm subsidy programs is economically unsound and fundamentally flawed.  The assumption of agriculture policy in Washington is that the market prices of crops are too low for farmers to earn sufficient revenue.  The reason for the low prices is an oversupply of crops on the market since food demand is not very price sensitive, or in economic terms, it is relatively inelastic.

However, instead of allowing the free-market to determine the price of agricultural products, the Senate measure sets forth programs that are counterproductive and ultimately aggravate the cause for low prices.  For example, the measure sets a higher target price for farmers to receive and then to supplement the farmer’s income pays them the difference between the target price and the low market price.  However, an incentive for farmers to grow more not less, of the oversupplied crops is provided by such subsidies. This results in the price of these crops to decline further necessitating even higher subsidies as has been the case in the past when farmers have responded to past subsidies by planting as many as 5 million acres more of the oversupplied crops.

Currently, American farmers export 96 percent of their crops.  However, contrary to its commitment to the World Trade Organization (WTO), the U.S. has indicated it would limit crop subsidies.  This most recent legislation jeopardizes such actions.  These proposed subsidy increases will hurt the U.S.’s ability to export farm products because America has raised farm subsidies as it urges its trading partners to lower them. 

It is time for Washington to stop micro-managing the free market and let prices be determined by supply and demand principles.  As the government continues to interfere with the market place instead of limiting its involvement, more harm will come to the American consumers, employers and employees.   The Senate had an opportunity to free America’s agriculture industry and reduce the burden on the taxpayers and consumers.  Instead it decided to subsidize multimillionaires by paying them billion of dollars of government corporate welfare subsidies.

“What is even more disheartening is that President Bush, the compassionate conservative, has once again decided to allow big government pork and government intervention instead of free market principles to reign as he will not veto this legislation but will quietly sign it into law,” said Dr. Joel P. Rutkowski, president of the American Voice Institute of Public Policy.  “Far too often, the President will use the bully pulpit to speak as a man convicted to conservative principle, yet when it comes to action he continues to promote a liberal democratic agenda of big government  and government interference in the lives of every American.

“Remember, President Bush, actions always speak louder than words.  And you can fool the American people for only so long before they finally figure out who you really are and what you truly believe.”

For Interviews Contact:

Joel P. Rutkowski, P.h.D.
President, The American Voice Institute Of Public Policy
757-436-5927
jrutkowski@americanvoiceinstitute.org

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