Tuesday, December 11, 2018

Meet the new farm bill, same as the old farm bill

We've been at this since 1933, when a one-time addressing of extremely unusual economic circumstances turned into the prototype for five-year cycles of revisiting major government interference in the free market.

A new goody included in this year's go-round is an absolutely nonsensical bit of raw redistribution - and not to some destitute grain grower:

[A new provision would] allow distant relatives such as cousins, nieces, and nephews to qualify for subsidies.
That subsidy is worth up to $125,000 a year, about twice 2017’s national median household income. It’s nice work if you can get it. And you don’t even have to bother with the actual work part. So long as you fill out the paperwork and claim some sort of management responsibility, which could mean as little as joining a conference call once a month, you can be eligible for subsidies, as can your spouse and all your family members.
And just as, on the individual scale, gummint largesse goes to folks far removed from the combine and the tractor, on the level of farms of various size, it's not the guy in bib overalls with calloused hands who's getting the preponderance of the gravy:

Farm bills are often touted as a way to nurture small businesses, protect “the little guy,” and save family farms, but the reality is quite different. A 2017 Congressional Research Service report found that “farms with market revenue equal to or greater than $250,000 accounted for 12 percent of farm households, but received 60 percent of federal farm program payments.” Other research by Vincent Smith at the American Enterprise Institute found that the smallest 80 percent of farms received just 10 percent of all subsidies.
Here's some other market distortions stirred into the mix:

This year's bill, like its predecessors, is a huge jumble of subsidies and other programs, such as quotas and price setting, that dole out welfare to corporate agricultural interests. It creates barriers for new farmers, wastes resources, and creates risk for farmers and taxpayers alike.

The bill leaves intact numerous harmful policies, including programs designed to shield the U.S. sugar industry from competition, which help keep U.S. sugar prices double those of the rest of the world. This hurts consumers and sugar-using businesses alike.
And when it comes to reining in cronyism and abuse, the final bill actually worsens the status quo. It would expand two expensive new programs from the 2014 farm bill: Agriculture Risk Coverage and Price Loss Coverage. ARC covers farmers for revenue losses, while PLC covers them for low prices. Under the 2014 bill, farmers had to choose one or the other. But this bill would let them go back and forth each year to maximize their subsidies. 
I used to write for a now-defunct farm magazine and on occasion I'd get an assignment of a sort of wonky, policy-level nature. After a couple of times, I noticed something. Even agricultural economists at big universities just assume all these subsidies and programs are baked into the farming life in perpetuity. Even if they'd ever-so-glancingly acknowledge the market distortion involved, it was taken as a given.

And the particulars of the programs would make my eyes glaze over. Acronyms and formulas out the wazoo.

Freedom is always elegantly simple in comparison to any alternative. It involves risks and responsibility that you don't have to deal with when the government is not coming between buyer and seller. But whenever it's tried, it makes for win-win outcomes between buyer and seller.


  1. Donnie just hasn't gotten around to straightening this out. After all, he told us today he has created the greatest economy in the history of our society.

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  5. But industrial hemp, so non-psychoactive, so beyond ludicrously banned when Republican Tricky Dick went to war against the hippies and the blacks, is back again. Mitch wants it for his state. Follow the money, as always.

  6. The rich may be getting richer but the frightening economic truth is "tax cuts and a slowing economy will erode America’s fiscal strength during the next decade, according to a new report from Moody’s Investor Service, the bond-rating agency. At some point, Moody’s might cut the nation’s top-tier credit rating."


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  8. Donald Trump has nothing to do with this post. Nixon's pot policy has nothing to do with this post. Tax cuts have nothing to do with this post.

  9. The legalization of hemp is new to this farm bill, calling the lie to your headline. I was wrong to blame Nixon for making it illegal though. As for prosperity you guarantee from the invisible hand, lowering taxes is not the way, necessarily. And Domald Trump has everything to do with this bill because if he doesn't sign it, it does not become law