- An array of convoluted US farm programs have their origins in New Deal history.
- The "dairy cliff" was just the latest peril on the farm policy path that farmers and taxpayers have been wandering.
- Despite high farm profits, farm lobby argues that today's wealthy farmers still need "safety nets" from taxpayers.
- The farm bill was among the first instances of wrapping countless disparate programs into one massive spending bill.
- The next farm bill should be the shortest in history. It should also be the last.
When Supreme Court Justice Elena Kagan recently referred to the Agricultural Marketing Agreement Act of 1937 as "the world's most outdated law" (U.S. Supreme Court, Oral Argument transcript, March 29, 2013), she could just as well have been referring to the whole convoluted array of U.S. farm programs that have their origins shrouded in New Deal history.
The "dairy cliff" over which milk consumers were left dangling on December 31, 2012 was just the latest peril on the absurd farm policy path that farmers, consumers and taxpayers on which have been wandering for decades. Years ago, the rationale for the "wool and mohair subsidy" was to assure we could have wool combat uniforms for Vietnam. Today, we provide crop insurance for export and biofuels crops like corn, soybeans and even cotton--all in the name of food security.
In fact, for generations no one has been able to maintain any plausible economic reason to support prices, subsidize business insurance, or distribute government payments, mainly to farmers of grains, oilseeds and cotton, while perpetuating convoluted regulations for milk marketing and trade barriers to subsidize sugar producers. Rationales that might have sounded credible in 1950 - e.g.: farmers tend to be poor; the free market just doesn't work - were shown over the decades to be weak rationalizations for transfers to the wealthy. Other stories, such as that farm subsidies aid rural economies, are similarly at odds with basic facts. Farms account for a tiny share of rural employment, and subsidies do not go to poor regions. Where rural poverty is an issue, a direct approach is far better than hoping for a trickle down through farm subsidies.
Despite record high farm profits and prospective profits (well-documented by record high land prices) the talented farm lobby argues that today's wealthy farmers still need "safety nets" from taxpayers. But as the farm bill delay stretches from 2012 into the middle of 2013, many objective observers are no longer convinced of the need for any of these programs.
The farm bill was among the first instances in the long, discredited tradition of wrapping countless disparate programs into one massive spending bill that no one could read and in which only each narrow interest knows where their special goody is hidden. For example, most of the spending in the farm bill is for the Supplemental Nutritional Assistance Program (SNAP or food stamps), which itself has become essentially equivalent to a cash transfer, with almost no relation to food and no significant connection to farming or any other feature of the farm bill. But, it has become and effective strategy to package farm subsidies with programs popular with urban members of Congress. At $80 billion per year, SNAP deserves its own legislation.
Farm commodity subsidies, including federal crop insurance, trade barriers, arcane price regulations for milk and other products, and the subsidies for the grains, cotton and oilseed are relics of a distant past. We seem to need no federal subsidy for lettuce, broccoli or alfalfa and those crops have fared at least as well over the years as the favored crops.
What about the rest of the massive farm bill? Rural environmental issues are not unique, so let us debate them in the context of environmental policy more broadly, not as an excuse for another form of farm subsidies.
The government rightly provides R&D support, and the evidence from high rates of return suggests an underinvestment in agricultural research by public sources. But, that evidence indicates that we should use some alternative authorization process, rather than trying to slip a few dollars into the farm bill where the R&D spending competes with dollars used to pay farmers directly. Imagine trying to fund the National Institutes of Health by transferring money from Medicare or Social Security. That is not a fight scientists are likely to win. So free agricultural research from the farm bill. It can stand on its own merits.
My proposal is simple. This next farm bill should be the shortest in history. It should also be the last.
Let's transfer the few programs that merit government attention to the appropriate legislation and department, and shut down the rest. Take the lead from Justice Kagan and accept that the U.S. farm bill is the world's most outdated law.
Visitors to Washington should consider an added bonus. The Department of Agriculture Administration Building fills prime real estate right on the Washington Mall next to the Smithsonian. The building itself is a superb piece of period architecture. It would make a fine museum of agriculture. We could even have a special room dedicated to the farm bill as a historical artifact.