Is there something about farming that makes regular economics inoperative? I mean, besides the farm bill?
House and Senate conferees are reportedly close to agreement on a five-year farm bill to replace the one that expired Sept. 30, 2012.
According to much conventional wisdom, this is cause for celebration. The gridlock that forced the farm sector to get by with temporary bills for more than a year is “the poster child for the state of dysfunction in Congress and American politics,” as Congress-watcher Norman Ornstein of the American Enterprise Institute put it.
Actually, Congress’ willingness to debate ag policy at length is a sign of political health. The farm bill long has been an irrational, subsidy-laden monstrosity. It’s about time somebody challenged the ag lobby’s hammerlock on Capitol Hill.
Why do we even need a farm bill, with its billions in subsidized crop insurance and definitions of “milk marketing orders” and “base acreage”? Is there something about farming, as opposed to other businesses, that makes market economics uniquely inapplicable?
Supposedly the goal is food security: making sure agriculture pays well enough that rural America can always provide affordable commodities to the cities and suburbs where 82 percent of the population lives. Perhaps government intervention was necessary to achieve this during the Great Depression, when the New Deal first federalized farm policy.
But that’s preposterous now. This obesity-plagued nation is ankle-deep in cheap food. In 2012, the average U.S. household devoted just 6.4 percent of its spending to food eaten at home, easily the lowest percentage in the developed world, according to the Agriculture Department (USDA). Yet the average person in the United States consumed 474 calories per day more in 2010 than in 1970.
Meanwhile, the USDA forecasts record farm net income of $131 billion in 2013, spread among many fewer farms than we had in the 1930s. U.S. farms export about a quarter of what they produce in a typical year, according to the American Farm Bureau Federation.
The cause of this abundance is simple: U.S. farms produce 262 percent more food than they did in 1950 while using essentially the same quantities of labor, seeds, feed and fertilizer, the Farm Bureau says. In 1950, the average dairy cow produced 5,300 pounds of milk; today, she gives 22,000 pounds.
U.S. agriculture is so productive that even natural disaster doesn’t threaten food supply as much as it once did.
Remember how we absolutely had to pass a farm bill in 2012, to save us from that year’s drought, which was the most extensive in half a century ?
Well, “1/8i3/8t is now clear that the impact of the drought on retail food prices will be smaller than initially forecast,” the USDA reports.”The inflationary pressure of the drought has been offset by factors such as decreased exports of many U.S. agricultural products, a stronger U.S. dollar, low energy price inflation, and decreased prices for many commodities not affected by the drought.”
Food-supply alarmism is a staple theme of ag-lobby propaganda. The menace this year is a spike in milk prices — to $8 a gallon! — if there’s no farm bill and the government is forced to buy up the supply, per an obscure 1949 law.
A recent report in Time explains that this is overblown, partly because the agriculture secretary can delay purchases and partly because other relevant costs, such as transportation, won’t be affected.
For the ag lobby, though, the point is to keep people worrying about a price hike instead of questioning the absurd legal quirk that makes one possible in the first place.
Supporters of the farm bill note that both the House and Senate versions would eliminate the egregious subsidy of direct payments that automatically awards growers of certain favored commodities $5 billion a year. That is a real reform.
But both versions would spend much of the savings on new protections for farms that could be “less transparent . . . and less predictable in terms of projecting budget outlays” than the old system, reports agricultural economist Roman Keeney of Purdue University.
This brings us to the one decent argument for the farm bill, which, in fairness to Ornstein, is the one he emphasized: About 80 percent of it is funding for the Supplemental Nutrition Assistance Program for the poor. The legislative twinning of farm subsidies and food aid reflects a decades-old deal across Congress’ partisan and rural-urban divides.
The Opinion section is produced by the Editorial Department to foster discussion about key issues. The Editorial Board represents the institutional voice of the Star Tribune and operates independently of the newsroom.