Crisis! Farmers Expected to Have Record Income
Late yesterday afternoon, the U.S. Department of Agriculture (USDA) released a report with new estimates on the overall net income for farmers in 2012.
Early predictions for this year claimed farmers would see a 6.5% decrease in their income from the record-setting yields of recent years. And if you listened to the hysterical clamoring of pundits and politicians, you could be forgiven for thinking that the drought was the long-awaited arrival of the Black Horseman of the Apocalypse and that only the immediate passage of a $1 trillion food and farm welfare bill could spare us from a dearth of rain fall.
The truth, it turns out, is the exact opposite. Net farm income is estimated to set a new record of $122.2 billion in 2012—this is both in spite of the drought and partially because of it. Most of the profits are due to corn prices, soybean receipts, and the massive increases in crop insurance indemnities. In other words, it’s due to the taxpayer-subsidized “safety net” that we’re comically led to believe is in jeopardy if a new farm bill isn’t passed.
According to the USDA, these record gains show that net farm income is “fairly stable,” as in previous drought years. Fairly stable? Yes, I would think record profits (courtesy of generous taxpayer subsidies and government consumption mandates like ethanol) show signs of “stability.” Only in governmental, bureaucratic parlance would record-setting profits necessitate the need for an increase in spending.
The conservative-led opposition to both the $383 million drought bailout package (H.R. 6233) and the $1 trillion FARRM Act (H.R. 6083) has been unprecedented. When Members return from the August recess, there will be increased pressure to utilize the drought as an excuse to shovel $1 trillion of spending onto the backs of the American taxpayers.
Given this new report, there is an even stronger argument to be made against this market-distorting welfare bill and the caterwauling cries that we are in the midst of a crisis are belied by the government’s own data. This would be shocking only if it weren’t so common.