Schizophrenic Farm Policies

The $280 billion farm bill pending in Congress provides a windfall for almost everyone involved in agriculture. Farmers who grow corn, wheat, cotton, or other major crops may qualify for commodity payments; farmers who don’t may qualify for government-subsidized farm credit. Farmers and ranchers who don’t qualify for private credit may also be eligible for credit subsidies. Subsidized crop insurance is also available, but many won’t purchase it because Congress regularly provides ad hoc disaster and emergency relief for droughts, freezes, and floods.

Massive pork-barrel subsidies to American farms are nothing new, of course. What is astounding is the contradictory nature of U.S. farm programs: some work to raise prices, while others work to lower them—which isn’t to say that the two tendencies work to cancel out any price changes. So what exactly is the goal? As Ernest C. Pasour Jr. and Randal R. Rucker explain in a recent op-ed, there is no coherent, over-arching principle guiding U.S. farm policy other than political expediency.

Agricultural policy is a mish-mash not only in the United States but also around the world, explains Alvaro Vargas Llosa in his latest syndicated column. He writes: “Farmers in Europe are paid to keep their land fallow because of a scheme called the Common Agricultural Policy; farmers in Argentina are being asked to give up 75 percent of their earnings through various taxes; farmers in the United States are more interested in feeding SUVs than in feeding people because the U.S. Congress has mandated a fivefold increase in the use of biofuels; and farmers in Africa are not experimenting with genetically modified crops because they are banned in many of the countries to which they might be able to export them.”

“The Schizophrenia of U.S. Farm Policy,” by Ernest C. Pasour Jr. and Randal R. Rucker (Investor’s Business Daily, 4/22/08)

“Where’s the Food?” by Alvaro Vargas Llosa (4/23/08)

Purchase Plowshares & Pork Barrels: The Political Economy of Agriculture, by Ernest C. Pasour Jr. and Randal R. Rucker.

“The superb book, Plowshares & Pork Barrels, by Pasour and Rucker, is both analytically rigorous and readable. It is the single best guide available to the historical path and complexities of U.S. agricultural policies.”
—Lee J. Alston, Professor of Economics, University of Colorado

Purchase Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa.

“Liberty for Latin America presents Alvaro Vargas Llosa’s thoughtful analysis of what has impeded Latin America’s progress and what needs to be done. It is well worth reading.”
—Lawrence Harrison, Professor, Fletcher School, Tufts University