Agriculture is easily the most distorted sector, with high tariffs and, in developed countries at least, large amounts of government subsidies through price supports and direct payments. On the other hand, developing countries, who have a comparative advantage in these products, cannot afford to subsidize their agriculture sector and face prohibitive tariffs for their products abroad. The powerful agriculture lobby groups, particularly in the large developed countries, make reform politically difficult. Chris Edwards, Sallie James and Dan Ikenson discuss the inequities of American farm policies.
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Rep. Frank Lucas (R-OK) (Bill Clark/CQ Roll Call/Newscom)
The House and Senate farm bills would repeal the costly and indefensible direct payment program, which sends taxpayer dollars to people who don’t even plant a seed.
But instead of just getting rid of direct payments, Congress has felt the need to add new programs that could be even costlier. Various commodity groups—e.g., corn, cotton, sugar—want their subsidies.
According to Politico, Frank Lucas (R–OK), chairman of the House Agriculture Committee, appears to view himself as the parental figure making sure everyone gets their slice of the subsidy pie:
For some folks [commodity special interest groups] to believe they don’t have to be part of the family anymore makes it a little difficult.… As chairman, I’m kind of like a parent sitting at the table. I’m trying to make sure everybody gets their fair portion [of subsidies] as the plates go around. I’m trying to make sure the biggest kid doesn’t shove all the little kids off the bench.
The groups that aren’t represented at this metaphorical table are taxpayers and consumers. If they were, subsidies wouldn’t be served.
This entire push for new subsidies is emblematic of the farm bill. There’s never any real reform to agriculture policy because in Washington, the concerns of special interests trump those of taxpayers and consumers. Subsidies and central planning are presumed to be proper policy.
Even many who claim to be in favor of limited government and free markets ignore these critical principles when it comes to the farm bill. They take a holiday from sound policy.
Congress isn’t bothering to ask whether there should even be new subsidies. Instead, the focus is on how new subsidy programs should work and how many billions of taxpayer dollars should be handed over to special interest groups—the “little kids.”
This may be the season of giving, but Congress shouldn’t dole out any new subsidies to special interests. They should be developing real agriculture reform.
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