While many current homeowners are feeling the pinch of the national real estate slump, things are apparently booming in farm country.
“Rural land prices are setting records … ” The Associated Press reports in a story out of North Dakota. “High commodity prices, while giving farmers a healthy bottom line, also have driven up the value of land — so much so that agriculture officials say the land itself has become the hottest commodity in farm states.”
In Iowa, the Farm Credit Services of America reports that the price of farmland rose 22.6 percent in 2007. In 2006, according to the U.S. Department of Agriculture, farm real estate values increased 14 percent nationwide, to $2,160 an acre.
It is against this backdrop that the House and Senate in coming months will attempt to reconcile competing versions of the five-year farm bill.
Regardless of the bill’s final form, you can bet the $286 billion measure — it could go higher, of course — will be a veritable cornucopia of giveaways to agricultural interests.
Even with commodity prices near all-time highs, each house wants to expand subsidy programs for growers of wheat, barley, oat, soybeans and other crops. Meantime, the Senate version creates new grants for vegetable and fruit growers.
All of this amounts to a massive tax on the poorest Americans, who must pay higher food prices to support farm handouts and protectionist policies that shield domestic growers from cheaper foreign competition. But that’s a small burden to bear when compared with the importance of farm-state lawmakers passing out goodies in order to secure re-election.
Neither the House nor the Senate legislation included a serious income cap that would limit subsidies to the wealthiest farmers. The Bush administration has pushed a $200,000 cap, making farmers who earn more ineligible for subsidies.
That would be a reasonable position at any time — but it’s even more so today, given that agricultural producers seem to be doing pretty well for themselves.