Subsidies for our plenty

I’m having an interesting conundrum pondering this particular video from the CATO Institute that came to my attention. It’s about 5 1/2 minutes long and may hit some of my readers where they live.

In a lot of respects I can see CATO’s point; however, there is something to be said for helping out the smaller farmers rather than the large multinational corporations. Perhaps there’s a better way than just handing them checks, though.

Farming is by all accounts a risky business. In order to make a profit, a farmer has to have three things simultaneously occur: good weather for growing the crops or allowing the purchase of their feedstock at a reasonable price, a steady market for the product (which can be an export market as well), and a price per unit which enables the grower to sell at a profit. Factor in the increasing costs for fuel, labor, equipment, property taxes, insurance, and regulatory compliance – mainly due to environmental concerns – and it’s small wonder that the tiny 40-acre family farm has all but disappeared.

On the other hand, a portion of the tax burden comes from paying for those subsidies the farmers enjoy and the price of many commodities is propped up artificially by mandates such as the one corn farmers profit from regarding ethanol. And in case the weather doesn’t cooperate, farmers can generally take advantage of federally-backed low-interest financing to stave off the bill collectors until the crops come in a more plentiful manner.

Like many other businesses, those who work the land for a living are forced to keep an eye on the doings in Washington and their state capitals. However, it’s also an unfortunate fact of life that just one regulation change can wipe out years worth of planning. While that is the right states are given thanks to the Tenth Amendment, I’m quite convinced that farmers in the end would be better off with at least the subsidies from Washington phased out – in return, federal regulations can and should be sunsetted as well.

Another topic which wasn’t brought out by the CATO video but I feel is worth discussing briefly is the relatively recent practice of rural landowners selling their future development rights for cash up front, akin to taking a smaller lump-sum payment in lieu of lottery winnings normally paid out over a number of years.

My contention is that these tradable development rights should not be made permanent but instead only be in effect for a limited period of time; appropriate to me would be a 20- or 25-year term. Since farming tends to be a generational pursuit and families have been known to stay on the same homestead for a century or more, I think it’s quite fair to allow each succeeding generation to decide for themselves whether they wish to place their land off-limits to development or not. They can re-evaluate their circumstances based on the conditions present at the time – perhaps they’d like to take advantage of their frontage on what used to be a sleepy country lane when it becomes a major artery decades later. Or, instead of going to the bank for another loan because of a poor harvest, they could sell a small portion of their land if local usage creates a demand for the acreage. It’s a matter of highest and best use, as land policy should generally be.

On a personal note, I appreciate the kind words about monoblogue which were shared by some of the attendees at our Tri-County Central Committee meeting tonight. I’m sure I gained a few extra readers there, so I hope this article served as a good introduction to what I try to write as thought-provoking insight and reporting. If I may, I’d also like to suggest reading two other sites I contribute to, Red Maryland and Red County, where I edit and contribute to the Wicomico County subsite as well as post to the national site on occasion.

Author: Michael

It's me from my laptop computer.

3 thoughts on “Subsidies for our plenty”

  1. I can sort of see your point with regards to development rights, but it’s a proposal that’s rife with problems.

    To begin with, how do you define a generation. Is it a set-time period (and would that time-period scale with life-expectancy)? Or would it simply be that every time the property changed hands the property rights reverted back to the new owner? I’d imagine the first to be politically unfeasible (i.e. what happens if a parent suddenly dies right after selling rights, is the kid stuck with the parents decision for years, in that case might as well keep the current regime). The second is even worse though.

    I live in a county where the sole local political issue is land development. Unfortunately the dominant voice is strongly anti-growth. As a result development has all but ground to a halt in Queen Anne’s County. If the property rights reverted when land changed hands than there would be severe problems since anti-growthers could possibly force developers to pay for the same rights several times over.

    I would posit the far better solution, at least economically if not politically, would be to abandon the “smart growth” policies that transferable development rights originated out of. That way development rights are tied to each parcel and there’s no artificially created need to sell development rights.

    Just throwing that out there.

  2. You make some excellent points, Waterman. I’ll admit I fell prey to conceding ground on that issue because in truth you are correct in your final analysis that the disposition of land should be up to the owner, period.

    But my argument could serve as an incremental “middle ground” to slow the advance of environmentalists and their zeal to “preserve” agricultural land. That practice is simply code for restricting the areas where growth can occur, thus increasing land costs in those areas deemed developable. No one says that these TDR’s couldn’t disappear entirely once the term was up and people became wise to the Smart Growthers’ scheme.

    To answer your question, the TDR would serve much as a deed restriction does. And yes, there are possibilities such as your example where a new generation coming in could be “stuck” with the TDR for years but they’ll likely be few and far between. Moreover, contrast that with the current practice of locking away land in perpetuity and I think I have a better idea.

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