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October 1996 Welfare for Carnivores 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 revealed, "Every 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 Act.

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 money.

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 reasons.

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 years.

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 it.

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.