Some More On Agricultural Subsidies
September 16th, 2007
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Regular readers would recall that agricultural subsidies hold particular interest for this blogger. While they definitely harm the farmers in the developing countries, do they benefit the West? Or more importantly even its farmers?
Since 1970, farm subsidies have totaled $578 billion, according to the historical tables of the U.S. budget. What has the public gotten for this vast outlay? Not much. Food would be produced without subsidies. Roughly 90 percent of commodity payments go to farmers raising grains (wheat, corn), soybeans, cotton and rice; these products represent about a fifth of farm cash receipts. Meanwhile, meat, vegetable and fruit producers get no direct subsidies. Does anyone truly think that, without subsidies, Iowa’s cornfields and Kansas’s wheat fields would go fallow?
If subsidies vanished, some high-cost farms would cut production or switch crops. Some land values would drop because one source of income (federal payments) would disappear. Still, food supplies would be ample. The proof: the rest of agriculture that manages without federal largess. In 2005, meat output alone (beef, chicken, pork, veal) totaled 86.8 billion pounds.[link]
And have subsidies saved the family farm in the West?–a favorite excuse offered by the European Union.
Well, maybe farm subsidies “saved” the family farm? Not exactly. Farm subsidies date to the Great Depression. In 1932, there were 6.7 million farms, and the farm population was 25 percent of the nation’s total. By 2002, the number of farms had dwindled to 2.1 million, and the farm population was about 2 percent of the total. More mechanization, better seeds and cultivation practices have enabled fewer, bigger farms to produce more food.
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