Overall, the Organisation for Economic Co-operation and Development says that European farmers get 35 percent of their income from subsidies! American farmers get almost 21 percent. The organization estimates that subsidies cost "rich nation" consumers about $1 billion a day.
But don't American subsidies go to "poor" mom-and-pop farm operations? No, they don't. According to the National Center for Policy Analysis (NCPA), farmers with incomes of more than $250,000 a year -- the top 10 percent of subsidy recipients -- receive more than 72 percent of all farm subsidies. The bottom 80 percent of farmers receive approximately $64 a month.
Protectionism, or tariffs on incoming goods, protects farmers. Payments to farmers, both directly and indirectly, enable American farmers to charge an artificially low price. After all, the farmers receive taxpayer dollars on the "front end," enabling them to lower prices on the "back end." The government, in 2004, gave farmers $5.3 billion in fixed direct payments. So-called counter-cyclical payments -- money given to farmers if the price of goods falls "too low" -- equaled $3.6 billion between 2002 and 2004. Farmers also received $9.1 billion in 2004 marketing assistance loans, enabling a farmer to use his crops as collateral. What if the farmer does not produce enough to repay the loan? Well, the government allows the farmer to forfeit the crop -- loan cancelled.
Government also subsidizes crop insurance and "sells" water to farmers at up to 90 percent below fair-market value. According to the NCPA, subsidies and import tariffs on sugar, for example, mean Americans pay three times what they would otherwise pay for sugar.
When politicians defend this corporate welfare, their eyes well up and their voices crack with emotion as they talk about "saving the family farm." But who cared about saving the family hamburger stand from the onslaught of McDonald's, Wendy's, Burger King and others? Never mind that greater efficiencies -- rather than unfair competition -- sparked the decline of the "family farm," just as hamburger franchises and the Wal-Marts of the world compete against the mom-and-pops. We call it capitalism.
The reporter in Kenya gave Obama an opportunity. The senator, in addition to attacking corruption, could have talked about transparent governments, respect for the rights of religious and ethnic minorities, and the critical importance of free markets. One Kenyan, when asked to explain Africans' enthusiasm for Obama, said, "Call it the donor mentality."
Indeed, Sen. Obama seemed more interested in a hand-out, rather than a hand-up.
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