Politics

J.D. FOSTER: The Emergency Spending On Farmers Was A Scam

House Minority Leader Hakeem Jeffries (D-N.Y.) hands over the speaker's gavel to House Speaker Mike Johnson (R-La.), Oct. 25, 2023. (Screen Capture/CSPAN)

If you are on the dole and you see a chance to fool politicians into increasing your welfare check, what would you do? Right. Now you know why the continuing resolution included $10 billion in non-emergency “emergency” funds for American agriculture.

The purported emergency is that American agriculture, or certain segments of it, are in “recession.” As with all good myths, the story begins with a couple of facts. According to government data, U.S. net farm income fell almost 20% from 2022 to 2023 adjusted for inflation and then fell again last year.

This almost 30% drop over two years certainly sounds like a recession in farm country, but now it is time for your Paul Harvey moment — the rest of the story revealing the truth behind the con.

Annual net farm income averaged $114 billion from 2011 to 2020 measured in 2024 dollars.

In 2021, net farm income shot up to an all-time high and then shot up again in 2022 to $199 billion. The 2022 record was 74% above the previous 10-year average. It was big-time good times on the farm.

Such once-in-a-lifetime results couldn’t continue, and so net farm income fell in 2023 and again in 2024 as claimed.

By 2024, net farm income was down to $138 billion. Relative to 2022 that was a big drop, but it was still nearly 30% above the modern average. That is the key figure the farm lobby was careful not to mention: Net farm income was still far above average.

The drop from a spectacular to a less-spectacular boom was the supposed recession used to justify the supposed “emergency” $10 billion in additional farm welfare spending.

Is there a hole in this logic somewhere? Maybe. The figures noted above are the average across all of American agriculture. Some sectors may have done poorly while others continued to do very well. It is a big, diverse industry. Maybe the additional welfare spending is targeted at those farmers in the poorly performing sectors. Maybe, but the figures the farm lobby used to con Congress into ladling $10 billion in additional ag welfare were the aggregate numbers.

When tough times hit in other sectors of the economy, businesses and workers adjust and endure. In some sectors of American agriculture, they do likewise. But in some, they gin up their lobbyists to press Washington for a bigger handout.

As America shifts away from combustion engines, eventually gasoline consumption will plunge. Are we going to throw Washington financial relief at idle gas stations to keep them all open? No way.

Increasing welfare payments for the farm sector keeps inefficient producers operating. Farms that can’t keep up need to be allowed to fail like any other business so other, more successful, more productive farms can absorb their land and workforce.

Our economic system is capable of prospering the nation like no other and is likely to do very well under President Donald Trump 2.0. But it is not of the “kinder, gentler” variety. For that you need to move to anemic Europe.

Our economic system is tough. It is unforgiving of failure. And it cannot work properly if Washington insists on meddling. That holds whether the meddling is from inane regulations or inexcusable prop-up spending.

Hard-working American farmers deserve our respect and admiration. They do not deserve bigger welfare checks. And Washington will never end the flood of red ink if it does not stop the phony “emergency” spending.

J.D. Foster is the former chief economist at the Office of Management and Budget and former chief economist and senior vice president at the U.S. Chamber of Commerce. He now resides in relative freedom in the hills of Idaho.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

(Featured Image Media Credit: Screen Capture/CSPAN)