John Stossel: Do Government Farming Subsidies Hurt American Farmers?

Farmers tell John Stossel that government farming subsidies don't really help.

ByABC News
October 16, 2008, 3:09 PM

Oct. 17, 2008— -- Every year, politicians promise that they are going to save the family farm. But government farm subsidies don't always mean good news for farmers.

This year, Congress passed another $300 billion farm bill. President Bush vetoed this farm bill -- twice. Sen. John McCain opposed it, calling it "bloated legislation that will do more harm than good." But Sen. Barack Obama supported it.

Obama wouldn't talk to "20/20" about the farm bill. Neither would 69 members of Congress who voted for it.

Finally, Randy Kuhl, R-N.Y., and Sheila Jackson Lee, D-Texas, agreed to speak.

Kuhl said farm subsidies help to keep rural communities alive, and without them people would move elsewhere and be forced to find different jobs. That's why he voted for the farm bill.

"The rural areas of this country are really being left behind, and I don't think we want anybody in this country to starve," he said.

Big Money, Small Towns

But farmers in Nebraska are doing pretty well. Home prices may be falling in most of America, but farmland prices are rising. In Nebraska: They've shot up 77 percent in four years. And it's not as if these subsidies are going to poor people: The average farmer makes twice what the average American earns.

Nebraska corn farmer Mike Korth has collected about $500,000 in subsidies in the last decade. He said he'll take the money, but he's against the farm bill.

"It's a bad bill," he said. "In the end, if you take a bunch of money, it's like they grab the treasure chest, they open the door on it and whoever can get the most out of it, you just run away with it."

But despite the billions spent on subsidies, farm towns are smaller than ever. In Randolph, Neb., Korth's hometown, store after store is boarded up.

"The school at one time had just short of 1,000 kids in it, and now there isn't 300," he said.

Actually, a government study found that the more farm aid a county got, the more likely it was to lose population.

Why would that be? Because subsides make it harder for smaller farmers to compete.

"Farm subsidies go to very, very wealthy farmers, not the ma and pa farm," economist George Mason University's Walter Williams said. "It's these huge agribusinesses that get the big subsidies."