Why do we pay farmers not to grow food?

Posted on July 11, 2010


One of the most complicated and passionately defended policies of many governments is that regarding agriculture. The European Union has the Appellation d’origine Contrôlée, Japan pays out huge sums to guarantee that they are self sufficient in rice production, and the US writes into its budget billions of dollars in farm subsidies each year.

The history of farm subsidy is rooted in the Great Depression. Unsustainable farming practices and a long drought reversed plentiful harvests and people went hungry. Agriculture programs were put in place as part of President Roosevelt’s efforts to fight the Depression. Later, Lyndon Johnson expanded them as a part of his Great Society program, with the stated aim of getting “a chicken in every pot.”

The most recent farm bill was passed in 2008 and will have to be renewed after five years. At the time it was thought to cost between $289 billion and $307 billion. Two thirds of the money will go to the food stamp program that gives poor families money to buy food. Relatively small amounts go to conservation programs. The remaining quarter, about $66 billion, is for farm subsidies. These take a couple of forms. Crop insurance is made cheaper. Farmers who grow staple crops, like wheat, cotton, corn and soybeans, get a check based on the acres they grow. Some other crops have set prices, and if the price goes below that the government makes up the difference for the farmers. Farmers are even paid ­not to grow certain crops, so that a limited supply will keep prices higher. The government is required to buy crops, particularly corn, meat, and cheese. Lastly, specific areas get earmarks. California get salmon fishing subsidies, while Kentucky farmers are paid to breed racehorses. 1, 2, 3

It is indisputable that farming is a difficult, risky business. Only in very recent history has society as a whole been insulated from the effects of drought and insect, disease and flood. America no longer starves when the wheat crop in Nebraska fails. Some of this is surely due to the help that small farms receive from the government, which keeps them in business. But the mechanism is flawed. The concentration of subsidies on grains, particularly corn and soybeans, and on acreage, gives money more to Monsanto and General Mills than to small vegetable farmers. This causes trade tensions and is part of the reason why junk food is so much cheaper than the healthier stuff. The food bought by the government goes into the school lunch program, so schools are required to feed kids a certain amount of cornmeal and cheese. Congress and the Department of Agriculture pay billions, and the result is unhealthy food for poor Americans and kids.

2 The Associated Press
3 The Congressional Budget Office

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