American Boondoggle: Fixing the 2012 Farm Bill

The 2012 Farm Bill will be hotly debated in Congress over the next year as members look to cut wasteful spending from the federal budget. Since the Great Depression, lobbying by farmers has proved particularly lucrative but has threatened to detach agriculture from the goal of efficiently producing food for consumers. Today, farm policy consists of an array of subsidies, regulations, spending programs, and land-use restrictions that are widely blamed for the increased cost of food, environmental degradation, fiscal burdens, and the failure of global trade negotiations. These inefficient and outdated policies, subsidized by US taxpayers in the 2008 Farm Bill at a cost of $307 billion, are once again up for approval.

AEI has commissioned academics with extensive knowledge of agricultural policy from all over the country to write papers on specific aspects of the Farm Bill, including their recommendations for reform.

American Boondoggle: Fixing the 2012 Farm Bill
By Barry K. Goodwin, Vincent H. Smith, and Daniel A. Sumner
Most farm subsidies go to substantial and successful operations and provide little support for the farms they were once intended to benefit. Many of the programs create barriers to more efficient agriculture in the United States, interfere with international trade, and have adverse effects on farmers in developing countries. This overview paper reviews the implications of some important basic facts and analyses as guidance for the 2012 Farm Bill. [Watch the Video]
We're Not in Kansas Anymore: Is There Any Case for Ag Subsidies?
By Barry K. Goodwin
The conventional wisdom that agriculture is at an economic disadvantage is incorrect. This paper cites empirical evidence to debunk the myths often used to justify agricultural subsidies.
Something for Nothing? Direct Payments and Title I Farm Programs
By Bruce A. Babcock
For a farm program to be efficient, it should be targeted at farm financial stress, but it shouldn't induce farmers to change their production decisions, and it shouldn't duplicate what the private sector can provide. Based on these three criteria, this paper determines the efficiency of Title I farm programs. [Watch the Video]
Corn Belt Moonshine: The Costs and Benefits of US Ethanol Subsidies
By Christopher R. Knittel
The federal government subsidizes the production of ethanol for use as a motor vehicle fuel through subsidies, tax credits, tariffs on imported ethanol, and fuel-composition standards. This paper examines the economic and environmental costs of the program. [Watch the Video]
Picking on the Poor: How US Agricultural Policy Hurts the Developing World
By Daniel A. Sumner
US agricultural policy influences global supply and demand. Many of those adversely affected by current US trade and domestic agricultural policies are among the poorest on the planet. This paper examines how US agricultural policy can be changed to benefit the world's poor.
Stuck in the Mud: How Farm Policy Undermines Free Trade
By Tim Josling

A quarter to a third of total farm receipts are obtained from overseas sales. While the trade title of the Farm Bill deals with some matters of trade policy, it is limited to unilateral actions. This paper examines how to make trade policy and farm policy more coherent. [Watch the Video]

Conserving Our Future: How to Reform Title II of the Farm Bill
By Tomislav Vukina
The federal government spends over $5 billion annually on nine separate programs that take farmland out of production or pay farmers to use their land in a more environmentally sensitive manner. This paper examines these programs and makes recommendations on how they can be run more effectively. [Watch the Video]
Premium Payments: Why Crop Insurance Costs Too Much
By Vincent H. Smith
This paper examines the federally subsidized crop insurance program. Under this program, the federal government subsidizes about 60 percent of the premiums farmers pay for private insurance to protect them against financial losses due to drops in the value of their crops. [Watch the Video]
Agricultural Disaster Aid Programs: A SURE Invitation to Wasteful Spending
By Myles Watts and Anton Bekkerman
This paper examines the structure and cost of the federal government's primary program to support farmers who lose crops from natural disasters: the Supplemental Revenue Assistance (SURE) program. [Watch the Video]
R & D
For Want of a Nail: The Case for Increased Agricultural R&D Spending
By Philip G. Pardey and Julian M. Alston
A failure to increase publicly funded agricultural research and development (R&D) will likely have long-term consequences for the sustainability of US agriculture in a competitive global environment and for the natural resources on which it depends. This paper examines the benefits of such increases. [Watch the Video]
Milking Consumers and Taxpayers: The Folly of US Dairy Policy
By Joseph V. Balagtas
The federal government has created an array of policies—production controls, subsidies, and marketing orders—that increase the price of milk for US consumers and increase the income of milk producers. This paper examines the economic and budgetary impact of these programs and offers policy alternatives. [Watch the Video]
Sweets for the Sweet: The Costly Benefits of the US Sugar Program
By Michael K. Wohlgenant
US families pay nearly twice the world price for sugar and other sweeteners because of federal government policies intended to protect domestic beet and cane sugar producers from cheaper foreign competitors. This paper examines the economic effects of these policies and proposes a dramatic reversal of course. [Watch the Video]