Sunday, September 02, 2007

Kansas papers ask if subsidies, at issue in farm bill debate, have led to rural economic decline

Have federal farm subsidies hastened the consolidation of farms, and thus the decline of population and small towns, in rural Kansas? Some experts there think so, Harris News Service reports in the first installment of a six-part series examining the effects of agricultural subsidies on rural Kansas. The service is part of Harris Newspapers, seven papers in Kansas and The Hawk Eye in Burlington, Iowa.

"Subsidies are at the heart of the debate as Congress works to write a new farm bill this fall. Among the provisions sought by President Bush and many lawmakers are limits on federal commodity subsidies paid -- especially to the biggest farms," Mike Corn writes. "The massive scale of federal farm payments further perpetuates an ever-increasing growth in the size of farms," in the view of Jon Bailey, director of research and analysis at the Center for Rural Affairs in Lyons, Neb.

Bailey said subsidies allow large farmers to raise rents, bid up land prices and expand. Corn writs, "Subsidies encourage farms to grow because farmers can obtain additional payments by further increasing their acreage, he said. When the size of farms grows larger, there are fewer farms for individuals to work on, leaving fewer opportunities in farming, he said. As a result, there are fewer business opportunities directly linked to farming. Bailey told Corn, "People who don't have the resources then are sort of left out of the equation."

Bailey also also said there is evidence that larger farms "they take their business to larger, regional hubs instead of locally owned shops," Corn writes. Mary Fund, communications director at the Kansas Rural Center, told him there is evidence in the harm of subsidies in a 2005 study done by economist Mark Drabenstott for the Federal Reserve Bank of Kansas City. (For the text-only version of the study, click here.) "In many of the counties whose farmers receive the most in subsidy payments growth in employment and new businesses is the weakest. Cornelia Butler Flora, an Iowa State University professor of agriculture and sociology, concurs. She said it is essential that the biggest subsidies be capped because they are contributing to the decline of rural of communities." (Read more)

Harris has posted columns on the farm bill here. For the chain's special-projects page, click here.

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