Posts Tagged: farm subsidies

As corn demand goes up, subsidies go down

The Wall Street Journal’s Scott Kilman visits Shelbyville, Illinois and reports that in “this typical Midwestern town” crop prices are now high enough that they no longer trigger billions of dollars in federal subsidies to farmers. Kilman’s narrative is a feel-good one for WSJ readers: the market has done what special-interest Washington politicians never could — cut farm subsidies in half during the last six years. The high crop prices are a result of both growing demand from consumers in developing countries like China and also the fact that each year millions of tons of corn is used to produce ethanol for auto fuel.

However, there are still egregious farm subsidies that ought to be eliminated from the U.S. Dept. of Agriculture budget. For example, the federal government still doles out billions of dollars so farmers uphold their promise to not grow crops in highly erodible land.


Cutting farm conservation subsidies

For the most part I’m opposed to the environment-related cuts in the respective 2012 budgets proposed by the Obama administration and Congress, but this one has some merit. Rick Barrett of the Milwaukee Journal Sentinel reports that Congress is threatening to eliminate the $2 billion conservation reserve program — a program (run out of the Ag Dept.) that pays farmers not to grow crops, with two very different goals:  keeping commodity prices artificially high and protecting land inhabited by wildlife.

It seems like there could be less expensive ways to protect wildlife (would wildlife sanctuaries be cheaper than subsidies?). Accustomed to federal support, the farmers who benefit from the program have an “I want cake but I also want pizza!” attitude where they are against cuts but also want to start using the land to plant high-profit corn and soybeans.

Competitive Farmers Want All Farmers to Compete

The nation’s byzantine farm subsidy program, administered by the Department of Agriculture, is neatly summed up in a story by Carolyn Lochhead in the San Francisco Chronicle.  She quotes California cotton farmer Philip Bowles:

The government has decided in their wisdom to encourage production of crops the market doesn’t want . . . [i]t must make political sense because it certainly doesn’t make economic sense. (more…)