SECTION: EDITORIAL; Pg. A32

LENGTH: 520 words

HEADLINE: Farm Harm

BODY:


THE SENATE is marking up a farm bill that was apparently devised by people with a canny sense of economics. The bill promises farmers a subsidy check that would vary in size according to how much they produce, which creates an incentive to plant as much as possible. The excess planting will in turn drive prices down, hurting the farmers whom the bill is supposedly helping. But the bill's authors have thought of that. They decree that low prices will trigger further subsidy checks. The bill thus compensates farmers for the consequences of its own perversity. You might think that members of the Senate Agriculture Committee would question this elaborate way of hitting taxpayers twice over. But most are offering the opposite complaint: They wish that more money were available to pour into the program. Sens. Kent Conrad (D-N.D.), Blanche Lincoln (D-Ark.) and Tim Hutchinson (R-Ark.) have all objected that too much of the $ 170 billion in the 10-year bill is being allocated to such things as rural development and agricultural research, leaving too little for commodity subsidies. Actually, rural development and research would claim a grand total of $ 3.6 billion in the legislation marked up so far. But the critics are not shamed by numbers.

Farm politics doesn't have to be this dismal. The Bush administration has taken a sane stand, and reformists narrowly lost a fight in the House to breathe sense into its version of the farm bill. The Senate bill now being marked up does at least set aside more money than in the past for environmental programs, though it should have been still more generous. And Sen. Richard Lugar, the ranking Republican on the Agriculture Committee, has proposed a measure that would mark genuine progress, if only his colleagues would support him.

The Lugar plan would reform subsidies in two ways. First, it would spread them among all kinds of farmers, rather than restricting them to cereal and cotton crops, which traditionally hog all the money. Second, it would limit the payout to the rich. Farmers would get a subsidy worth 6 percent of their first $ 250,000 in output, then 4 percent of the next $ 250,000, then only 1 percent of anything between $ 500,000 and $ 1 million. This means that no farmer could get more than $ 30,000 from taxpayers; this greatly offends one particular planter in Sen. Lugar's home state, who over the past five years has pocketed a remarkable $ 3 million. But the Lugar formula would greatly lessen the perverse incentive to overproduce that is a chief flaw in the farm program.

The mystery is that farm reform makes political as well as economic logic. Senators who represent states that do badly from the existing program outnumber the beneficiaries. That includes senators from Virginia and Maryland, which receive little from the traditional program because local farming is not concentrated in cereals or cotton. Why wouldn't these senators support a bill that costs taxpayers less? Why wouldn't they vote to expand environmental programs that could clean up the Chesapeake Bay and bring other local benefits?

LOAD-DATE: November 14, 2001