Why we still have farm subsidies

Why we still have farm subsidies

The farm bills now before Congress — one from the Senate, the other from the House — attest, if nothing else, to the inertia of politics. There is no “public interest” (a phrase often meaningless in Washington) in having government subsidize farmers. Food would be produced without subsidies. The uncertainties and insecurities faced by farmers from unpredictable weather and global markets, though often compelling, are paralleled by the uncertainties and insecurities faced by many industries from disruptive technologies, erratic business cycles and shifting public tastes. Yet, unlike most industries, agriculture is lavishly subsidized and protected by government.

The explanation is force of habit. Since the Great Depression of the 1930s, when there were plausible reasons to aid farmers, government has consistently accorded agriculture special treatment. The politics of doing so long ago became self-perpetuating. Without the massive subsidies, the Agriculture Department would be far less important. So would the congressional agriculture committees and the crowd of farm groups (sometimes, it seems, one for almost every crop) that lobby for benefits. And certainly the farmers who receive payments and protections feel entitled to them.

All this creates a powerful and shared vested interest in safeguarding the status quo, even as different interest groups and their congressional champions fight ferociously over the structure and distribution of benefits. The cost has been considerable. From 1995 to 2012, the various subsidies totaled $293 billion — more than $16 billion annually — according to the Environmental Working Group (EWG), a critic of present programs. This understates the true costs, because it includes only the on-budget costs of explicit subsidies. Excluded are higher consumer prices paid on some products (sugar, for instance) that are partially shielded from market competition.

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