Sunday, April 8, 2012

Farm Subsidies And Politics

Why do rural areas see themselves as self-sufficient when they receive large governmental transfers?  Bloomberg looks at a Texas county that voted 83%-16% for McCain in 2008 (h/t Ritholtz):
John Loepky’s story is one of Texan self-reliance. Starting out in the mid-1980s with less than $100 in his pocket, Loepky first found work on farms and by the mid- 1990s owned his own land. Today he coaxes cotton, peanuts and wheat out of 3,300 acres of parched soil in Gaines County, getting as much as $2.4 million in revenue on a good year.
In bad years -- like 2011 -- he can rely on the government for help. Record-low rainfall triggered record-high crop insurance payouts of $125 million last year to local farmers, with taxpayers subsidizing $30.8 million of the $46.9 million of the premiums paid in the county that year. Loepky received about $1 million, which paid half of his loans for the year.
Landowners such as Loepky who rely on the federal safety net are less fond of the man who heads the government offering it. Gaines voters backed John McCain -- who voted against reauthorizing farm payments in 2008 -- over subsidy-supporting Barack Obama by 83 percent to 16 percent, the most lopsided margin among the top 10 aid-receiving counties in the U.S.
“Republicans understand business better than Democrats,” says Loepky, 47. “We need strong banks, low taxes. We need a safety net for farmers, but we need other things too.”
The landscape in Gaines, a west Texas county on the border with New Mexico, features dry, wind-swept farmland punctuated by oil rigs owned by Exxon Mobil Corp. (XOM) and Hess Corp. (HES) Crude, the area’s biggest industry, is as plentiful as water is scarce. Alcohol, at least officially, isn’t present at all. The county has been legally dry since 1944.
The whole situation is somewhat mystifying.   I guess all of the rural Democrats abandoned the party with the changes of the late '60s and '70s, and haven't come back.  But where does the hatred of government itself (and big cities) come from when rural areas benefit from the higher taxes paid in cities and distributed to the rural areas?  I'm at a loss to explain it all, but race is a significant factor.

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