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TIME TO START CUTTING BACK ON FEDERAL FARM SUBSIDIES

SHARE TIME TO START CUTTING BACK ON FEDERAL FARM SUBSIDIES

Debate on a new five-year farm bill has opened in Congress with one of agriculture's most cherished programs coming under fire - the payment of crop subsidies to farmers. It is unlikely that subsidies will be eliminated, but the budget crunch offers an excellent chance to at least reduce them to some degree.

Legislation now in the Senate would provide about $54 billion in commodity supports over the next five years. That's $8 million less than approved in a preliminary budget resolution last month.But a mere $8 million reduction in an appropriation of more than $50 billion is minuscule. In fact, President Bush has threatened to veto the entire farm bill unless subsidies are reduced in a substantial way. Congress should respond to that demand for several reasons.

First, federal crop price supports should not be a permanent part of agriculture. The supports distort what should be a free market economy.

Second, the cost of such subsidies is enormous. At a time when the federal budget deficit seems out of control, it hardly makes sense to be pouring billions of tax dollars into unnecessary but politically popular programs.

Third, the United States can hardly demand that the European Economic Community stop subsidizing crops while its does the same thing.

Unfortunately, the outlook for ending crop supports is not hopeful. A proposed amendment to eliminate subsidy payments to farmers with gross incomes of more than $500,000 was soundly defeated.

Foes argued that gross income was not the same as take-home pay, that farmers could divide holdings and earnings under other family member names - something that some already do to collect those federal checks, and that it would take an army of auditors to police such a requirement.

Yet answers could be found to such objections. Why not use federal income tax returns to ascertain the justification, if any, for receiving payments? An invasion of privacy? Maybe. But people who keep dipping into public funds should expect to live in a goldfish bowl.

Ultimately, the best answer would be to treat agriculture like any other business and let farmers make it on their own in the open, competitive marketplace. Subsidies should be phased out over several years.

With today's federal budget deficits draining the strength out of the American economy, this is a good time to begin such a withdrawal of artificial crop price supports.