This year's drought has reduced harvests and hurt many farmers, but it also has raised crop prices and shrunk surplus stockpiles. The higher prices mean the government spends less money on subsidies.
That being the case, why not use this opportunity to start getting rid of expensive subsidy programs and all the problems they cause.? Let agriculture operate in a free market.Unfortunately, that isn't happening, either in America or Europe. Instead, the same programs designed to deal with surplus production and support low-cost exports remain firmly in place.
Farm subsidies are horrendously expensive and counter-productive. They depress prices and encourage farmers to keep growing food, even when there is little or no market for it, except to sell it to the government as surplus. And it makes farmers dependent on the government.
Farm organizations themselves have long recommended that subsidies be phased out. Choosing a time when subsidies are not being used as heavily would be a good place to begin. But because the subsidies become less expensive, the budgetary pressure to remove them also tends to disappear.
As one trade expert pointed out this week, whenever good weather results in huge harvests, the government spends more. When weather conditions - drought, smaller harvests, etc. - allow programs to be cut back, government does not retrench.
The result is that farm programs constantly get more expensive. Last year, the U.S. farm population dropped by 240,000, to 5 million, the smallest number since before the Civil War. Yet the federal budget for farm programs grew bigger - some $25 billion in 1987.
Encouraged by this year's higher prices, farmers in Europe, the U.S., and Latin America are likely to overplant for next year. There's no risk in it for them. If bumper crops depress prices, governments will buy the surplus caused by overproduction.
Those surpluses, in turn, lead governments all over the world to get rid of stockpiles by giving the surplus to exporters - at taxpayer expense - so it can be sold abroad at less than cost. This has led to much bad feeling between the U.S. and Europe.
The biggest beneficiary of all this is the Soviet Union, which imports large quantities of food while the U.S. taxpayer picks up a significant portion of the tab.