Wednesday, August 29, 2007

Purpose of the Farm Bill

The farm bill was set up years ago to ensure a steady supply of cheap food to the American public while maintaining the family farm in rural America. Both are noble goals, but as I’ll try to show today and in the next couple of days, having the government try to legislate with subsidies, has resulted in the “Law of Unintended Consequences” kicking in, often having exactly the opposite affect.


As to the first objective of supplying a steady supply of cheap food to the American public, it can be argued that we have one of the best and lowest cost food supplies in the world. However, if that is a major goal, then why do nearly all of the farm subsidies go to only five crops: corn, cotton, rice, soybeans and wheat? Why can the free market supply us with fruits, vegetables and meat products, without any subsidy but the government feels compelled to pay the producers of those five row crops?


In the late 80s I traveled tens of thousands of miles in rural IL, IA and MN at a time when agriculture was in a deep depression, dwarfed only by the Great Depression of the 30s. I saw no fields that weren’t planted in those areas despite corn at $1/bushel and soybeans at $4. Farmers would plant all of those five crops with or without a subsidy. Why not let the free market work on those five?


A second objective of the farm bill is to maintain family farms in rural America. Despite numerous farm bills, the number of farmers has continued to decline and the farm bills of the past have probably accelerated this decline.


Tomorrow’s blog is on why farmers are the second oldest aged profession in the USA.