June 12, 2012
Many provisions of the current farm bill will expire at the end of September. It is estimated to have cost Americans $284 billion over the last five years.
Most programs in the farm bill were established during the Depression-era and they have not changed as our agricultural landscape has changed. Through various farm subsidies, the burden of agricultural risk is placed on taxpayers. Heritage Foundation policy expert Diane Katz says “Americans are taking a double hit: Tax revenues are used to subsidize producers, and production limits raise the cost of products.”
The number and size of farms has dramatically changed since the depression-era as well:
The number of farms has dramatically changed, decreasing from a peak of 6.8 million in 1935 to 2.2 million in 2010. During that same period, however, the amount of land in farms declined by less than 13 percent. Taken together, the two trends reflect fewer, but larger, farms. Indeed, the number of farms with more than 1,000 acres increased by 14 percent between 1982 and 2002. In the same period, farms with 50 to 1,000 acres declined by about 17 percent.
These trends are important to note because they directly affect agriculture policy. Because the distribution of subsidies is largely influenced by the volume of farm production, larger farms are receiving a larger proportion of the payouts.
The current farm bill legislation also distorts the food market, artificially inflating food prices by limiting the quantity farmers are legally able to produce.
There is no doubt that farmers face risks in their job but there is no such thing as zero risk in entrepreneurial ventures. Katz argues “to the extent that Congress artificially shields some farmers from the reality of their occupation, they are more likely to take bigger risks running their farms.”
Overall, the farm bill burdens taxpayers, increases the cost of food, and keeps farmers from producing to their potential. Read more of Katz’s ideas on how Congress should address the Farm Bill.
Do you think the programs in the farm bill should have been updated during the last 79 years?