Washington Post Farm Policy Stories: A Case Study in Urban Legend: Part 1 by Jeff Harrison, of Combest-Sell and Associates AgWeb.com The Washington Post (the Post) Stories Are Cynical, Misleading, Inaccurate, Contradictory, Misplaced, and the Product of Ulterior Motives. Cynical. The stories are highly cynical so zeroing in on a specific example is as challenging as pinpointing when and where Joe McCarthy went wrong. For example, the July 2, story appears on the front page, above the fold, and continues in the "A" section for two whole pages and is entitled, "Harvesting Cash: Reaping Money for Nothing, Farm Program Pays $1.3 Billion to People Who Don't Farm." But on the last page, there is a small disclaimer noting that the $1.3 billion figure is measured over a 6 year period ($216 million per year), accounts for 3% of total direct payments, and is based on all people receiving only direct payments and not other payments, suggesting that none of these people are real farmers. The story then focuses on residential areas in a part of the country especially impacted by urban sprawl where homeowners receive payments on residential acreage, as if this is representative of those receiving the $216 million per year. The story mentions but does not spend much time on many others who live in rural, rather than ex-urban, areas and who have decided, for example, to graze cattle on their land or grow and harvest timber for business or conservation reasons. Those who raise cattle or timber would probably take issue with the Post's concluding that they are not agricultural producers. The Post never bothers to break down how much is actually going to residential homeowners as opposed to people who are still actively engaged in agricultural production, presumably because that would substantially reduce the total dollar figure. But what the Post totally glosses over is exactly what the law intended: as long as a person complies with swamp-buster and sod-buster laws to protect wetlands and soil and uses the land for an agricultural or conserving use, as opposed to commercial and industrial development, he or she is eligible for direct and countercyclical payments. Ironically, the law the Post complains of was intended to help advance two policy objectives the Post appears to have always supported: increased trade and conservation. So, at the end of the day, the Post dedicated its front cover and two full pages in one story to reveal that some unknown but probably very small fraction of 3% of direct and countercyclical payments go to non agricultural producers consistent with the law and the policies advocated by the Post. Misleading. There isn't space to discuss every misleading aspect of the two stories but here are some examples. Gross Income Does Not Equal Net Income or Profit. The stories are careful to refer to the gross receipts of the farmer rather than net income after taxes and production costs, not to mention personal expenses any person incurs, such as a home mortgage, health insurance, college tuition for the kids, and other costs. Anybody with common sense knows gross receipts don't equal net profits and sometimes can and do result in a net loss. Nobody Wants to See the Federal Government Purposefully Decrease the Value of their Biggest Lifetime Investment. The stories attribute higher land values to farm policy and claim that this favors large farmers over small farmers. The first and most obvious points to make about currently high farm values is that farm values are consistent, if paling by comparison, to national trends in commercial and residential real estate, and it is better than the alternative, which is depressed values. As a home is to many American families, land is also to U.S. farm families their major asset and investment, comprising about 79 percent of total farm assets. Farm policy may contribute positively to land values, but trends suggest that commodity market prices and other factors, such as competing uses for land, are the key factors. Land values tanked when prices sank in the mid to late 1980s even as farm bill funding reached record highs, and then land values rose in the 1990s when commodity prices peaked and farm bill funding declined. Still today, real land prices remain 23% below their peak in 1981. By the same token, government policies, such as the mortgage deduction, may impact residential home values around the edges but other factors are far more significant. In any case, it can scarcely be imagined that American homeowners would support any change in policy designed to bring down the value of their homes, a substantial part of their nest egg. Farmers are no different. It is worth noting that the argument about land values is a typical example of farm policy critics seeking to have it both ways. If, for example, the Post is interested in assisting only small farmers (if any at all), it should appreciate the fact that, according to USDA statistics, 69 percent of the total farmland (which the Post apparently wishes to devalue) is owned by small farmers. Americans Have Always Come to the Aid of Disaster Victims and Insurance Never Makes One Whole. The case that farmers should not receive emergency disaster benefits under farm policy because some have crop insurance is uninformed. Just a quick scratch beneath the surface of this argument reveals that some crops are simply not insured under crop insurance, that crop insurance is not conducive to other crops, such as rice and sugar cane, and that still other crops are under-insured due to a high deductible or a decline in insurable yields resulting from multiple year disasters, for example. The American people have always responded with relief when neighbors are hit hard by natural or even man made disasters because that is who we areŠand because insurance does not cover all losses and rarely makes a person whole. Disaster aid can help fill some though probably not all of the gap. Inaccurate. The stories indicate that the government "handed out more than $25 billion in aid" to farmers and that this is 50% more than what is provided to families receiving welfare - but this is shamefully inaccurate. That figure appears to include a nearly $1 billion tobacco buy-out that was financed not by the taxpayer but by the tobacco companies. That figure also includes conservation payments to the tune of nearly $2 billion that are not income support programs at all but payments to landowners to offset the cost of carrying out conservation practices deemed important as a matter of public policy and which the Post and other farm policy critics support. The figure also includes the cost of one time emergency disaster assistance of about $2.5 billion, which was offset with other cuts to agriculture. In fact, the figure quoted in the story is off by more than 30% if the reader is to be given the true cost of the farm policies that were the focus of the two Post stories. This translates into a half a percent of the federal budget. Meanwhile, food stamps, an important component of assistance to needy families, alone amounted to nearly $33 billion in the same year - about double the cost of these farm policies. Add on top of this other important food nutrition programs for the needy and Temporary Assistance For Needy Families and the figure tops $64 billion, fully three quarters more than the cost of the farm policies complained of. Contradictory. The thrust of the first story was that people should not receive direct payments if they are not growing a crop. Then, the second story plaintively states that the main problem with loan deficiency payments (LDPs) is that they hurt world commodity prices by encouraging overproduction because they do require the producer to grow a crop. The Post has advocated programs to protect water, air, wetlands, wildlife, habitat, and soil, but then ridicules policies that effectuate these goals. The Post supports the WTO and minimalizing trade distortions, but it excoriates policies designed to achieve these objectives. Misplaced. The United States Senate Committee on Finance has repeatedly cited an official government report noting that the U.S. Treasury fails to collect $300 billion per year in taxes owed, for a total of $2 trillion over 6 years. It would take the farm policies the Post complains about over 117 years to spend - in total compliance with the law - that which has already been lost in just 6 years because apparently some tax laws are not enforced. Yet the Post largely ignores the proverbial Elephant in the room that could nearly wipe out annual deficits and substantially pay down the debt, while devoting an entire series to scrutinize an amount that pales by comparison and which benefits people who work hard and follow the law. Ulterior Motives. Judging by its past articles and editorial pages, it is no secret that the Post is not a fan of current U.S. farm policy, or any U.S. farm policy for that matter, if the policy's principal objective is to help farmers cope with low prices and production losses in order to compete on a lopsided global playing field. Printed With Permission.