By Pamela Rice
Government handouts that prop up food animal
industries are a ready-made pipeline of tax-payer money, without
which mega-killing corporate confinement systems could not have
become the perversion of nature they are today. Pamela Rice explains.
In a three-part series that began July 7, the Boston Globe
year, an estimated $150 billion - in the form of direct federal subsidies
and tax breaks that specifically benefit businesses - is funneled to
American companies. Critics call it 'corporate welfare'." The series
noted that this $150 billion eclipses the annual budget deficit of
$130 billion and is more than the $145 billion paid out annually for
the core programs of the social welfare state.
Grants and subsidies are not all that U.S. industry is afforded. Industry
today is also largely exempt from its fair share of the tax burden.
Also revealed by the Globe series: just after World War II, the nation's
tax burden was roughly split (equally) between corporations and individuals.
But now, according to the U.S. Office of Management and Budget, the
corporate share of taxes has declined to one-quarter of the total amount
collected. So, being afforded taxpayers' funds on the one side and
being exempt from taxpayer responsibilities on the other, has added
up to quite a combination for industry in recent history. And this
proclivity toward regressive taxation continues. Ergo, when the new
Republican-majority Congress recently found tens of billions to cut
over the next seven years from social services to balance the budget,
the trend to put the tax burden on average citizens was only exacerbated.
Only two percent of the cuts were made on subsidies to industry.
Is industry worth all of this support? Drawing upon research that has
come in from a wide range of political perspectives, groups from the
left wing to the right agree that tax breaks that benefit specific
companies and industries are blatantly unfair and bad for business.
It's been found that corporate subsidies often don't pan out toward
yielding jobs; and when they do, the jobs often end up overseas. Correspondingly,
recipients of corporate welfare often are not asked to account in any
way for the subsidies they receive. Some of the most generous corporate
welfare out there, the Globe series revealed, goes to agriculture.
And if readers need a reminder, it should be noted that agriculture
in the U.S., by and large, necessarily means animal agriculture - from
grain harvesting to meat packing.
The following are just a few examples of corporate welfare spending
by the U.S. Department of Agriculture (USDA) that are of interest to
vegetarians and ecology-minded people alike: - In 1994, as part of
the ongoing Export Enhancement Program, Cargill, Inc. received $203
million and Continental Grain received $169 million, resulting in the
reduction of the selling price of their grain overseas to remain competitive
with European Union companies, which are also subsidized. - Over the
last 16 years, the USDA's Export Credit Program has provided $50 billion
in U.S. government credit guarantees for loans to foreign companies
or governments for agricultural sales (mostly for American feed grains),
at a total operating cost to U.S. taxpayers of $5.7 billion. - The
$100 million per year Market Promotion Program provides taxpayer money
to private companies and their trade associations for overseas promotional
activities, such as advertising and market research. These consist
of the following typical programs: in 1993, $125,000 was provided to
promote American frozen bovine semen; in 1993, Tyson Foods (a major
producer of products made from dead chickens) received $800,000; McDonald's
has taken nearly two million dollars to promote Chicken McNuggets to
the developing world. - Ranchers on public lands, mostly in Western
states, enjoy grazing fees at roughly one-quarter their market value.
The fees do not cover the costs the U.S. government must pay to maintain
the lands. All told, grazing management by the Bureau of Land Management
costs approximately $200 million per year, not including the long range
environmental costs; all this just to benefit a small number of cattlemen.
That Totally Hidden Subsidy
But the biggest subsidy of all to animal
agriculture is one that is totally hidden: the government policy
which allows farm animals to be exempt from the Animal Welfare
This "mother of all subsidies" ultimately does take its toll. America's
animal industries are saved untold billions they would otherwise have
to spend to provide humane treatment for farm animals. The effect of
these subsidies has allowed the meat and dairy industry to grow, which
translates into power to counter environmental as well as health concerns
put forth by vegetarian and environmental groups. In the trenches of
Washington D.C., animal industries fight on a daily basis the slightest
movement toward any legislation to put in place humane conditions for
food animals. The reason is simple: humane treatment of animals costs
Ag Issues and the Presidential Candidates
As for Clinton and Dole - do vegetarians
voters have a choice? Just after the Republicans took control of
Congress in 1994, the candidates did have a chance to offer leadership
against corporate waste in government. Clinton's own Labor Secretary
Robert Reich challenged (even dared) the new legislative potentates
to cut corporate welfare. But neither Clinton nor Dole jumped on
the bandwagon. Presidential campaigns cost big money, and it seems
you can't get elected these days without big industry approval;
fighting corporate welfare is not the way to go.
On agriculture issues in particular, as private agriculture consultant
John Schnittke puts it, when it comes to Clinton or Dole, it's "Tweedledee
and Tweedledum." Both Clinton and Dole favor export programs, access
to free markets and cuts in capital gains taxes, and they both oppose
grain embargoes - all positive standpoints from the viewpoint of agribusiness.
Either a President Clinton or a President Dole challenging government
payouts to agriculture is not likely to happen, and don't even think
about concern here for animal welfare on the farm. [See
Craig Seeman's article for information on Green Party candidates.]
In late April of this year, according to a New York Times story, Clinton
used his executive authority to shore up beef prices by having the government
buy about $50 million in beef. In May we found that this was only the
first wave of a number of purchases totaling $163 million worth of beef
patties and roasts for the school lunch program. On the same day of the
$50 million announcement, Clinton ordered the USDA to open 36 million
acres of land for grazing. The land is part of acres that the government
now pays private owners to keep idle for conservation and environmental
On trade issues, the Clinton administration was a staunch supporter of
a free trade policy, pushing through the North American Free Trade Agreement
(NAFTA) and the General Agreement on Tariffs and Trade (GATT), both big,
essential policies for U.S. agricultural growth. Clinton, along with
his appointed Secretary of Agriculture Dan Glickman, have stood strong
in working to push European nations to accept hormone-injected beef (and
the skins of fur-bearing animals caught in U.S. leghold traps). Vice
President Al Gore worked especially hard earlier this year to get Russia
to accept U.S. poultry imports after it threatened to ban them, citing
safety concerns. "Even though Clinton has been supportive of free trade,
I think Dole and the Republicans would be even more supportive in trying
to knock down the remaining barriers," says Jeff Conrad, managing director
of Hancock Agricultural Investment Group in Boston.
"Freedom to Farm"
House majority leader, Republican Dick Armey
of Texas, once compared the House Agriculture Committee's inner
sanctum to Al Capone's Chicago, divvying up agriculture largess
like gangsters. Throughout its development over the last two years,
Bob Dole counted himself a backer of the controversial Farm Bill.
Nicknamed "Freedom to Farm" by its Republican writers, this bill
was reluctantly signed by President Clinton early in April. Touted
as a program to wean farmers away from the government dole, ironically
it will, because of prevailing high prices for farm goods, cost
the taxpayers an estimated $23 billion more than if previous legislation
had remained in place - coming to $35.6 billion over the next seven
Upon close examination, "Freedom to Farm," now officially named the Federal
Agriculture Improvement and Reform Act, is nothing more than a general
renewal of giant agricultural payouts that serve to benefit the large
corporate farmer over the small family farmer. The difference this time
is that the rhetoric that put it into law makes it appear as though it
were reform legislation. It is, in fact, just the opposite.
According to the Environmental Working Group, which conducted a tedious
study of the Act when it was still a bill, " 'Freedom to Farm' doesn't
cut farm subsidies - it increases them.... For today's 'agriwelfare'
recipient, business has never been so good (or so bad for taxpayers)." It's
almost hard to believe, but subsidy payments to farmers under this new
set of laws will be made to farmers who sign up for the program regardless
of crop prices in the market. In addition, there are absolutely no requirements
whatsoever to farm anything at all - a change from the old policy which
paid farmers not to farm; and, in general, the bigger your operation,
the more you will receive. And then, adding insult to injury, your "farmer" doesn't
even have to reside on a farm to receive the payments!
New Deal-style Democrats in Congress, such as Iowa Senator Tom Harkin,
as well as the Clinton administration argued against "Freedom to Farm" on
the grounds that farm subsidies would have to be cut too deeply - keeping
the "safety net for the small farmer" is the phrase of choice. Now that
grain prices have literally doubled over the past year, Clinton must
feel pleased that he gave the bill his signature. In a recent speech,
he said, "I wish I could promise you that we would have $5.00 corn, $5.50
wheat and $8.00 soybeans [historically high grain prices] forever, but
I can't do that. It is encouraging that a lot of farms are finally able
to earn some money, do some improvements that are needed on the farm,
save some money for the years that may not be so good, and improve the
overall economic position of family farmers around this country."
It's interesting, however, to note who the farmers are who are benefiting
from the new farm bill. In an editorial a year ago in April, the New
York Times criticized Clinton for defending subsidies to farmers who
it called "the nation's richest welfare recipients; full-time farmers
typically earn four times as much as non-farm families." According to
the Environmental Working Group, the top two percentile of federal farm
subsidy recipients are receiving nearly a full quarter of the agricultural
subsidy payments. In addition, they discovered that a good proportion
of the taxpayer-sponsored payments to farmers go to absentee farm owners
who live in some of the country's most well-heeled neighborhoods. Will
these city-dwelling farmers receiving checks in the tens of thousands
of dollars per year be making improvements on the farm? Don't count on
Pamela Rice is the founder of The VivaVegie Society. This article
is excerpted from the September 1996 edition of The VivaVine, newsletter
of The VivaVegie Society, P.O. Box 294, New York, NY 10012. Membership
is $15 per year.
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