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Monday, July 25, 2011

Elimination of the Department of Agriculture

"The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation and foreign commerce. The powers reserved to the several States will extend to all the objects which in the ordinary course of affairs, concern the lives and liberties, and properties of the people, and the internal order, improvement and prosperity of the State." — James Madison

Not many people know what the Department of Agriculture does with its $152 billion dollar budget and 98,000 employees. They think that the USDA is their mainly to help farmers and pass out farm subsidies. While the part about passing out subsidies is true the part about helping famers is not. The USDA does much more than hand out billions in farm subsidies.

The Department of Agriculture provides an array of subsidy programs for farmers and imposes extensive regulations on agricultural markets. It operates food assistance programs, such as the food stamp and school lunch programs, and it administers many subsidy programs for rural parts of the nation. The Forest Service also forms part of the Department of Agriculture.

The department will spend $152 billion in 2011 or more than $1,200 for every U.S. household. It operates about 235 subsidy programs and employs 105,000 workers in about 7,000 offices across the country

In 1862 The U.S. Department of Agriculture was established by President Abraham Lincoln who called it the "people's department." That same year Congress passed the Morrill Act that provided grants of federal land to the states. The states were to use the proceeds of land sales to create colleges focused on agricultural studies (that’s how many colleges got the initials A&M tagged to their name).

In 1900 There were 11 million Americans employed on farms and 2,900 employed by the USDA. A century later there were 3 million employed on farms and 105,000 employed by the USDA. The following are a few of the more significant events on the timeline of the USDA:

The timeline for the USDA is quite detailed in a report by the CATO Institute and can be viewed by clicking here. I reading the timeline you will see how the USDA morphed from a governmental department that had a defined mission of assisting farmers into a massive bureaucracy that issues subsides, insurance, regulates farm lands, provides school lunches and distributes food stamps to 49 million Americans. The food stamp program is no doubt one of the larger wealth redistribution scams in the United States.

According to the CATO Institute:

“The largest portion of the U.S. Department of Agriculture’s budget consists of food subsidies, not farm subsidies. Food subsidies will cost taxpayers $79 billion in fiscal 2009 and account for about two-thirds of USDA’s budget. The largest food subsidy programs are food stamps; the school breakfast and lunch programs; and the women, infants, and children (WIC) program. The federal government as a whole has about 26 food and nutrition programs operated by six different agencies.

The USDA’s food subsidy programs developed out of the need to dispose of farm production deemed surplus under commodity price support programs. Today, food subsidy programs are supported by farm interests, anti-poverty groups, and organizations of state and local program administrators. Farm and food subsidy programs provide both rural and urban legislators reasons to vote for increased USDA funding.

Farm and food subsidies make political sense, but they don’t make economic sense. Farm policies that increase commodity prices harm the lower-income families that food subsidy programs are supposed to help. For example, federal dairy policies raise the price of milk, which works against the goals of the school lunch and food stamp programs. The solution is to repeal both farm and food subsidies, and allow open market competition to cut food prices for all families.

Food subsidy programs were designed to aid lower-income families, but the situation of those families has changed dramatically since the programs were instituted. The problem of insufficient calories for children in past decades has been replaced by growing obesity problems.2 Also, as the U.S. economy has grown, the incidence of poverty and hunger has declined. Despite those trends, food subsidy programs are serving more recipients and continue to increase in cost.”

The USDA is responsible for five egregious programs; Agricultural Subsides, Regulations and Trade Barriers, Rural Subsides, Food Subsides and The Forest Service. Each of these programs is detailed in the CATO Institute report.

All agricultural and rural subsidies in the Department of Agriculture’s budget should be abolished to save taxpayers more than $30 billion annually. In addition, agricultural trade barriers should be repealed. Current agricultural and rural policies are economically and environmentally damaging, and they create unfair transfers of wealth.

The department's food subsidy activities—food stamps, school lunches, and WIC—are properly local and private functions. They should be devolved to the states, with each state determining appropriate policies for its own residents. Such reforms would save federal taxpayers about $98 billion annually. Some states may decide to fund food subsidies on their own, but competition between the states would likely result in smaller, more innovative programs.

Forest Service subsidies to state governments and private businesses should be ended. Congress should also explore options to transfer the national forests to the states or to new independent trusts that would be self-funded from forest-related receipts.

According to the CATO Institute these reforms would eliminate more than 90 percent of the USDA’s budget, saving federal taxpayers $131 billion annually, or about $1,100 per U.S. household. Under the proposal, the USDA would retain responsibility for animal and plant health inspections, food safety, grain and packing inspections, and conservation activities. Any responsibility retained by the federal government for conservation and forest management and protection not transferred to the states should be moved to the Department of the Interior. The activities related to food safety and packaging could be transferred to the Department of Commerce.

The savings from eliminating the Department of Education and USDA would amount to 238 billion and eliminate 109,400 federal jobs with their unfunded liabilities for pensions and health care.

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