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Lawrence W. Reed

Just Say No to Farm Subsidies

J. Sterling Morton Was a Principled Free-Market Advocate

Congress is busy tying itself in knots of anguish over the future of federal farm subsidies. Many lawmakers are unwilling to stand up to the farm lobby and do what’s right. But exactly 100 years ago, one Secretary of Agriculture had the courage to do just that. His name was J. Sterling Morton, and he served in the second administration of President Grover Cleveland.

With the encouragement of his grandfather and uncle, young Morton devoured the writings of economist Adam Smith and statesman Thomas Jefferson. He became a staunch proponent of their ideas of free markets and limited government by the time he went to college in his home state of Michigan. The notion that no free society could survive if government started redistributing the people’s wealth became a life-long guiding principle for Morton. A strong advocate of voluntarism, not more centralized political power, he was the man who originated Arbor Day in 1872 to encourage private citizens to plant trees.

In the late 1890s, when the Democrats were the party of free trade, Morton was three times the Democratic candidate for Governor of Nebraska. In 1892, when Grover Cleveland recaptured the White House for the Democrats, he chose J. Sterling Morton to be his Secretary of Agriculture and gave him a free hand to liberate farming from the federal dole.

Noted economic historian Burton Folsom has written that Morton proved to be as principled a free market advocate as the President who appointed him. “In his four years as Secretary,” Folsom observes, “he chopped almost 20 percent from his department’s budget. He fired unproductive bureaucrats, starting with a man who held the job of federal ‘rainmaker.’” Then he slashed the travel budget: if farmers wanted to hear a spokesman from Washington, they would have to pay the bill to send him.

“If the Department of Agriculture is to be conducted in the spirit of paternalism, the sooner it is abolished the better for the United States,” Morton declared. Accordingly, he cut farm subsidies wherever the law gave him the authority. He reduced the government’s role in beet sugar production with these words: “Those who raise corn should not be taxed to encourage those who desire to raise beets. The power to tax was never vested in a Government for the purpose of building up one class at the expense of other classes.”

In 1895, Morton ended the free seed program. For 60 years, the government had sent free seed to farmers. But many farmers didn’t even use the seeds; in fact, fewer than one person per thousand even acknowledged receiving them. “Is it a function of government to make gratuitous distribution of any material thing?” Morton asked. He called free seeds a “gratuity, paid for by money raised from all the people, and bestowed upon a few people.”

In a biography of Morton, historian James C. Olson writes:

 

Every bill to appropriate money for special purposes was looked upon suspiciously by the Secretary. If it could not run the gamut of rigid laissez faire, if there was the slightest danger that it would extend the functions of the government, if it was paternal in any aspect, the Secretary of Agriculture was against it. When, for example, J. Z. George, Chairman of the Senate Committee on Agriculture and Forestry, asked his opinion on a bill to appropriate money for the extermination of the Russian thistle in the states of the Northwest, Morton asked in return whether it was “the business of the Government of the United States to make appropriations out of which men, women, and boys are to be hired, at wages fixed by law, to exterminate weeds, called Russian thistles, any more than it is the business of that Government to prescribe the manner of plowing, planting, and cultivating cereals, cotton, and tobacco, and to limit the wages to be paid cultivators?”[1]

Those who favored subsidies and business as usual were aghast at Morton. They wrote him vitriolic letters and filled newspapers with their attacks on him. Many urged President Cleveland to fire Morton, but the President was elated with the cost savings his agriculture secretary was achieving. This was the President who had once vetoed a $10,000 appropriation for drought-stricken farmers in Texas by declaring, “ . . . though the people support the government, the government should not support the people.”

Morton himself challenged his critics. He called the pro-subsidy Granger Society a “bunko establishment.” He urged a farmer in Iowa to quit “plowing with preambles, planting with resolutions, and gathering by legislative enactment” and get on with the business of an honest day’s work. His battles with lobbyists and the millions of dollars he saved became almost legendary in Washington.

When Morton left the nation’s capital in 1897, the subsidy crowd slowly returned. Free seeds were again distributed. By the 1930s, the federal government was paying some farmers not to produce at all. By the 1950s, even mohair producers were getting federal handouts. Today billions are doled out to subsidize a wide range of farm commodities, and it seems farmers sometimes produce as much for the government as they do for the market. Many agricultural economists believe that farm subsidy programs actually increase instability in the industry because the rules governing them change so often.

The experience of New Zealand is instructive: after that country abolished all farm subsidies in 1986 with a mere eight months’ notice, the farm economy improved and output rose. The awful predictions of the subsidy-seekers that disaster would ensue never materialized.

Author Osha Gray Davidson, writing in the January 4, 1993, New York Times, termed the U.S. farm subsidy program “hopelessly outdated, exorbitantly expensive and environmentally and socially devastating.” Far from “saving the family farmer,” they price American produce out of world markets, hurt low income families, and swamp the farmer with endless regulations. “A whopping 73 cents of every farm program dollar,” Davidson noted, “ends up in the pockets of 15 percent of the nation’s superfarms.” In other words, the large and well-off get the biggest checks, while their smaller competitors get a pittance in cash for the strangling controls subsidy brings. Because of these realities, there may be considerably more support for the abolition of subsidies among farmers themselves than is generally believed.

As Congress tries to muster the courage to challenge the government’s destructive role in agriculture, its members ought to look to J. Sterling Morton for inspiration. One hundred years ago, he didn’t waffle on the issue; he knew what had to be done, and to the extent the law allowed him, he did it with a flourish. []


1. James C. Olson, J. Sterling Morton: Pioneer Statesman, Founder of Arbor Day (Lincoln, Nebraska: University of Nebraska Press, 1942), pp. 358-9.

There Are 4 Responses So Far. »

  1. Just to say “no” is probably not a good idea, but to say “less and different” would be a good idea. Today’s farm bill safety net does increase the instability of agriculture as its result is to subsidize and consolidate higher risk behavior. As each farmer relies on the “safety net” they migrate toward the 2 or 3 crops that reap the highest reward and therefore increase the risk of failure through the lack of diversity – on each of their farms, but more importantly as a nation and food system as a whole. The farm bill does provide vital information to stabilize food prices as it records planting and other production data that the economy uses to determine price/rationing/etc. Another very unique trait in agriculture is the use of natural capital and the inability for the economic system to account for it. It becomes an economic externality of large proportions. The conservation title of the farm did help shore up erosion issues in the 1930-70s, but since then the centrally planned economy is failing. In this case, the farm bill has prevented progress as most everyone relies on the USDA to take the conservation lead, but it no longer can. The governance of natural resource management must migrate back toward the private sector with the USDA playing a supporting, not leading role. Agricultural is poised to implement a new resource management model as described in EcoCommerce 101: Adding an ecological dimension to the economy. http://www.ecocommerce101.com

  2. I beg to differ with Mr. Gieseke. I would prefer that they just drop the program immediately with like in New Zealand, 8 months notice. Just enough to cover one growing season. Let’s stop pretending that there will not be any pain but as is already known most of the drop of revenue is for people at the top who based on government support is producing the most useless crops (i.e. the GMO variety, requiring unsustainable farming methods, and producing food of dubious value which cannot be measured or traced because of government policies). I’ve no sympathy for these farmers and I think a good shock to their system would help them focus the minds on what consumers actually want. Variety of organic foods grown in environmentally sustainable ways. Once the supplies of these foods increase, the cost of eating organic will drop and more of the population will benefit from as well as providing for a readily available export market to all parts of the world without trying to extort governments to accept produce they know is bad for the population.

  3. People in the private sector know best. But then again they don’t have to get re-elected.

  4. I know that this is an older article, but its truth still rings clearly. Farm subsidies may be an understood way of life for some farmers in our Agricultural sector, but business is business. Unless a business makes a profit, it will cease to be a business–it is a charity. We as Americans are going to have to remember how far we have fallen away from sound economic principles.

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