Agriculture as Economic Stimulus

As a new agriculture secretary is confirmed, questions remain about farming subsidies.

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On Capitol Hill last week, Democratic Sen. Kent Conrad of North Dakota leaned into his microphone and opined about the need for the federal government to punch some life back into the national economy, starting with a particular bill.

"There is, I would submit, no more important piece of legislation in terms of stimulus for this economy...that is before the Congress now," Conrad said.

Conrad, however, was not referring to the much hyped $150 billion stimulus package proposed by Treasury Secretary Henry Paulson, which solidified this week after several days of negotiations with House leaders of both parties.

Instead, he was referring to the controversial farm bill, which in one way or another affects every American who pours a bowl of cereal, drives to work, buys produce, needs food stamps, or eats anything from Angus beef to jelly beans to spinach.

To call the farm bill "the most important" medicine available for the ailing economy is an opinion, but it's certainly not blatant hyperbole. Each year, the farm bill is responsible for sending billions of dollars to farmers in the Midwest in the form of subsidies, which help set the price of corn, wheat, soybeans, oats, fruits—in a phrase, the price of food. It has serious implications for human health—the ubiquity of high fructose corn syrup in the American diet owes its origin, in many ways, to the farm bill—as well as for trade agreements and alternative energy (ethanol is made from corn).

Conrad's remarks on Thursday came during the Senate confirmation hearing for the administration's nominee for a new secretary of agriculture. It also comes as the Senate and House are preparing to face off with the White House over how much support farmers should be getting from the government.

The nominee, Ed Schafer, formerly the governor of North Dakota and a moderate Republican, received few tough questions from his inquisitors and provided mostly easy responses. There were no moments of gripping tension, no flashes of anger reminiscent of the hearings last fall for Attorney General Michael Mukasey. In fact, the most contentious point at stake yesterday seemed to be whether Schafer's nomination could be expedited to allow him to parade in with President Bush for next Tuesday's State of the Union address.

The ease of Schafer's appointment process, however, belies a pending political storm. Both houses of Congress have already passed similar versions of the farm bill and are expected to meet soon to smooth out their differences.

President Bush, having viewed the menu, says he doesn't like what he's being served. He has repeatedly promised to veto any farm bill legislation that reaches his desk that resembles the bills in their current form.

The main source of their dispute is funding. The White House has said the government is shucking off too much money to rich farmers, megabusinesses, and "Park Avenue millionaires," people who live on the East Coast but own land in the Midwest. Officials say that subsidy payments should be limited to people who make less than $200,000 in adjusted income.

In practice, such a policy would represent a drastic overhaul of farm policy, which has relied on government subsidies since the Great Depression. Not surprisingly, legislators in the so-called farm bloc—and representing both parties—have balked at the idea. The bill they have produced, while reforming some policies, leaves the subsidies largely in place.

Now Schafer enters the mix, like a new general in the middle of the battle. Yet rather than brandishing his experience, he is playing up his newness. "I hope as the new kid on the block I can come in with a fresh perspective," he said Thursday.