Bloomberg Gets Beat Up for Faulty Editorial
Bloomberg News ran an editorial titled “Farmers Making $100 Billion Don’t Need Subsidies to Grow” that was picked up by a handful of newspapers.
The title alone struck a nerve in rural America. Farmers and ranchers who have suffered everything from severe drought to unforgiving wind and rain, and in many cases, the loss of an entire crop, only to read headlines like this written by someone a thousand miles away, were irritated to say the least.
The Bloomberg editors all but said agriculture—and the domestic food and fiber supply it supports—wasn’t worth government investment.
“Try telling that to the 21 million Americans employed in some stage of agriculture, or to the scores of businesses—ranging from publicly traded equipment manufacturers to Main Street retailers—that benefited from the more than $300 billion farmers spent in 2011,” Farm Policy Facts responded.
But it turns out we weren’t the only ones who had a problem with Bloomberg’s tall tale. John Mages, president of the Minnesota Corn Growers Association, addressed some of the facts presented in the story, and set the record straight in the Mankato Free Press.
While I do take issue with a few statistics in the piece, what concerns me most is that the authors appear to be painting current farm policy with a rather broad brush.
The op-ed would have readers believe the nation could eliminate a $15 trillion debt and a $1 trillion dollar annual deficit by eliminating this small fraction of the budget used to help pay for insurance and policies that absorb at least some of the price shocks in a badly distorted global market. But it just doesn’t add up.
Bloomberg claimed that producers received $25 billion in subsidies in 2011, but the Congressional Budget Office (CBO) says the number is less than half that: $11.7 billion.
Bloomberg also said expenses included a $7 billion loan program, a $4 billion counter cyclical program, and $7 billion for crop insurance. Again their math was way off. CBO scores the outlays at $55 million, $126 million, and $6.4 billion respectively.
Of particular surprise to Mages, was Bloomberg’s call to eliminate or drastically cut crop insurance, without which farmers who borrow more money every year to produce a crop than most will borrow in a lifetime would have to do so without insurance, according to the American Enterprise Institute.
“For two recessions in a row, farmers have been credited by observers from The Wall Street Journal to the Federal Reserve for driving economic recovery. According to the USDA, in 2011, U.S. agriculture spent $320 billion producing $410 billion in goods, with that last figure exceeding the GDP of all but 25 countries,” Mages wrote.
These efforts helped reduce the U.S. trade deficit by $26.5 billion and ensured Americans pay less of their disposable income on food than anyone else in the world, even in the face of growing foreign subsidies.
All of this was accomplished with the help of farm policy that’s been under budget for 10 years and costs about one-quarter of 1 percent of the federal budget.
As President Dwight Eisenhower once said: “Farming looks mighty easy when your plow is a pencil, and you’re a thousand miles from the corn field.” If the Bloomberg reporters would like to take a closer look, rural America would be happy to have them.