Can We Get Over Our Obsession with Agriculture?
Dan Griswold writes today about our depressing continued subsidization of the agriculture business, up to and including gutting any reasonable energy policy in favor of subsidizing corn farmers.
Beyond shear inertia and the fact that Iowa leads the primaries, can anyone really explain this. For God sakes, we have a cabinet-level position for agriculture, and, in case of a massive Cylon attack, the secretary of agriculture is 8th in line for the Presidency.
Here is some perspective: Agriculture, even if you include fishing and forestry, accounts for 1.1% of US GDP. $122 billion of total value added. Computers and electronic parts is a larger industry. As is entertainment and recreation. As is the restaurant industry. Heck, Exxon and Wal-Mart are probably more deserving of cabinet positions.
somebody:
I have only one thing to say. Have you ever really thought about the children?
December 13, 2007, 12:06 amAnonymous:
Last time I checked, most of the Exxon and Wal-Mart employees and customers have children. So what's the point?
December 13, 2007, 4:20 amDavid B:
While I agree that our subsidies are wrongheaded, I think that it's worth it to have a cabinet-level official minding the store (even though it's so small with regard to GDP).
If there is a major world war or catastrophe, I think we'd all be glad to remember that we're a net food exporter, and that while we can go for quite a while without a new laptop, we can't last all that long without wheat.
I see our food production as the single most important component of our national security. Also, I think that it does take a lot of inspectors to prevent (or reduce the incidence of) tainted meat, et. al.
December 13, 2007, 8:36 amrufus:
We might keep in mind that Ag Subsidies (paid out) actually DECREASED by $11 Billion, last year.
December 13, 2007, 8:58 amBearster:
Hmm, so the case is that if something is *important* then government ought to regulate and subsidize it?
Just for shits and giggles, I'd like to ask what people think is UNimportant? I'd like to be in whatever business that is!
December 13, 2007, 9:52 amJohn Dewey:
Warren,
I think the Iowa caucases influence not only current presidential candidates but also future wannabe's. The fact that North Dakota, South Dakota, Nebraska, and Kansas each have exactly the same number of senators as California, New York, Florida, and Texas is probably a more important factor.
My guess, though, is that economic ignorance of voters may be the biggest factor behind all subsidies. The average American just doesn't understand how subsidies reduce his standard of living.
December 13, 2007, 10:08 amdearieme:
It's not just you. The EU and Japan play similar silly-bugger games.
December 13, 2007, 10:45 amPhil:
John Dewey,
Just to add to your point: the subsidies go to relatively few people, but are paid by all of us. So those who benefit from the subsidies have more of an incentive to fight for them than the rest of us have to fight against them.
December 13, 2007, 12:47 pmMike:
It might be interesting to ask what would happen if all ag subsidies were dropped. I have a cousin who is as successful an independent farmer as you can be in the upper Texas panhandle who receives subsidies - how much I don't know and his success certainly hasn't been built on subsidy. About three years ago he made a remark that I have been thinking about ever since which was that without the subsidies the communities in that part of Texas would die. You can say "so what" but looked at from that perspective the subsidies may not be any different then various urban programs designed to help or rebuild communities. I don't know the actual numbers but I would guess that very few farmers are actually getting rich on subsidies and knowing that the price of some commodities has actually dropped in real terms over the past twenty or so years the only way that crops can be raised without converting completely to mega-large scale agri-business is through this method. Most of us have heard the outrageous stories and even my cousin admits there is folly in paying off farmers for keeping land out of production but at the end of the day there probably is some sort of stability factor involved or created through this action. There is a lot of risk in farming - to which you might say "then get out" but realistically speaking that's probably not a very easy thing to do, although many do. If prices are down because various world competitors can undercut us through low labor rates and few regulatory barriers, I can stretch the meaning of "subsidy" to include those factors; i.e. some advantage has accrued to a producer because of national or regional conditions and perhaps policies. In the case of labor rates being low, what if a national government suppressed labor movements and thus suppressed wages - wouldn't this be a kind of subsidy through government policy?
In any event, I did a very cursory look at the US budget a few years ago and came to the conclusion that if we are really interested in cutting this mammoth it's no good getting wound up about expensive toilet seats or even relatively small agencies like the Department of Agriculture. The mega-money is going to Defense, Health and Human Services, and Social Security. I don't see how're going to reduce the latter so that leaves us with the other two.
As far as the Wal-Mart/Exxon comment I would assume that the Department of Commerce has at least some of their interests at heart. And the Department of Labor and the Department of Veterans affairs don't seem to be tied to GNP. I would suppose that Agriculture is seen as a national strategic issue regardless of the small size of its output in comparison to the entertainment industry which mostly, it seems, is more interested taking us down.
December 13, 2007, 1:28 pmMike:
It might be interesting to ask what would happen if all ag subsidies were dropped. I have a cousin who is as successful an independent farmer as you can be in the upper Texas panhandle who receives subsidies - how much I don't know and his success certainly hasn't been built on subsidy. About three years ago he made a remark that I have been thinking about ever since which was that without the subsidies the communities in that part of Texas would die. You can say "so what" but looked at from that perspective the subsidies may not be any different then various urban programs designed to help or rebuild communities. I don't know the actual numbers but I would guess that very few farmers are actually getting rich on subsidies and knowing that the price of some commodities has actually dropped in real terms over the past twenty or so years the only way that crops can be raised without converting completely to mega-large scale agri-business is through this method. Most of us have heard the outrageous stories and even my cousin admits there is folly in paying off farmers for keeping land out of production but at the end of the day there probably is some sort of stability factor involved or created through this action. There is a lot of risk in farming - to which you might say "then get out" but realistically speaking that's probably not a very easy thing to do, although many do. If prices are down because various world competitors can undercut us through low labor rates and few regulatory barriers, I can stretch the meaning of "subsidy" to include those factors; i.e. some advantage has accrued to a producer because of national or regional conditions and perhaps policies. In the case of labor rates being low, what if a national government suppressed labor movements and thus suppressed wages - wouldn't this be a kind of subsidy through government policy?
In any event, I did a very cursory look at the US budget a few years ago and came to the conclusion that if we are really interested in cutting this mammoth it's no good getting wound up about expensive toilet seats or even relatively small agencies like the Department of Agriculture. The mega-money is going to Defense, Health and Human Services, and Social Security. I don't see how're going to reduce the latter so that leaves us with the other two.
As far as the Wal-Mart/Exxon comment I would assume that the Department of Commerce has at least some of their interests at heart. And the Department of Labor and the Department of Veterans affairs don't seem to be tied to GNP. I would suppose that Agriculture is seen as a national strategic issue regardless of the small size of its output in comparison to the entertainment industry which mostly, it seems, is more interested taking us down.
December 13, 2007, 1:30 pmMax Lybbert:
By definition subsidies keep people in a business that isn't profitable for them. It's not a question of them getting rich off the subsidies, but a question of why we are paying people to stay in a business that isn't profitable. A lot of people want to be farmers because it runs in their family.
Well blacksmithing runs in my family ( http://www.uintah.lib.ut.us/scripts/as_web4.exe?Command=Doc&File=VexpressW.ask&DocID=3051497 ). I want to be a blacksmith. I don't care to get rich; I just want to be a blacksmith. What government program will hand me subsidies so that I can open an unprofitable business? My great-great-great grandfather C.F.B. Lybbert was a blacksmith, and I want the government to coddle me so that I can be a blacksmith too!
December 13, 2007, 1:45 pmMax Lybbert:
Oh, and don't say "farmers make food, and we will always need food." That argument fails for at least two reasons. One, we don't necessarily have to get food from American farmers. Two, the reason the government hands out subsidies to farmers is that food prices are low, and they are low because of an oversupply. In fact, the most famous subsidy is a government check paying a farmer not to plant food!
December 13, 2007, 1:48 pmMike:
First of all, I didn't say anything about "coddling". As far as I know there are a lot of government programs that will give you money to do things that aren't really profitable, so farming is hardly a stand-alone industry or recipient. And I didn't say I was in favor of it. After some more research I found this site from the Cato Institute which may be of interest.
http://www.cato.org/pub_display.php?pub_id=5233
December 13, 2007, 3:27 pmAllen:
I don't think it's about the timing of the primaries. It's that there is little too lose politically by supporting these things. How many votes will California's deligation loose by supporting sugar subsidies, tarrifs and import quotas? Guys like Senator Conrad on the other hand, being from North Dakota where something like 30-40% of sugar is grown, would loose a lot. Maybe there's some back scratching. Conrad supports fed money for big transit projects in NYC or LA and in return he gets support for the sugar subsidies.
December 13, 2007, 9:24 pmJohn Dewey:
mike: "In any event, I did a very cursory look at the US budget a few years ago and came to the conclusion that if we are really interested in cutting this mammoth it's no good getting wound up about expensive toilet seats or even relatively small agencies like the Department of Agriculture."
I disagree, Mike. We need to get wound up about all government waste, even if it's just a few billion dollars.
December 14, 2007, 8:49 amJohn Dewey:
Mike: "There is a lot of risk in farming - to which you might say "then get out" but realistically speaking that's probably not a very easy thing to do, although many do."
How is it not easy to do? Thousands and thousands of jobs are advertised through Monster.Com and elsewhere.
December 14, 2007, 8:52 amJohn Dewey:
Mike: "the only way that crops can be raised without converting completely to mega-large scale agri-business is through this method."
One could have made the same anti-bigness argument about automobiles or furniture or clothing or any other good.
Why should fighting economies of scale be a goal for our government, Mike? Why should I care whether it is Farmer Brown or Tyler Farms who grows the rice or the wheat I eat?
December 14, 2007, 9:16 amAnonymous:
I am sorry but I believe that there is some incorret information above, agriculture accounts for about 78% of the US GDP
The reason for this is because the US government uses subsidies to pay farmers for dumping their product on the international market, lowering prices.
December 2, 2008, 5:18 pm