Op-Ed Slams Farm Subsidies as "Crony Capitalism"

January 18, 2016 05:10 PM
Op-Ed Slams Farm Subsidies as "Crony Capitalism"

Criticism over crop subsidies is nothing new. The latest person to take a swing at them is Vincent Smith, an economics professor at Montana State University. He argues that farm subsidies persist due to political power rather than economics in a recent op-ed in U.S News & World Report.

“The empirical evidence with respect to income redistribution and other economic efficiency of most U.S. farm subsidies is unambiguous,” he writes.

That’s because 15% of farm operations receive 85% of the farm subsidies. This argument fails to take into account that U.S. Census data shows that a minority of farms produce the majority of commodity value, however. The University of Illinois points out that 20% of Illinois farms produce 80% of the state’s commodities, for example.

Smith has additional contentions with U.S. farm subsidies, though.

“Many farm programs waste economic resources and provide incentives for environmentally damaging practices,” he writes. “In addition, by distorting domestic and global markets, they create difficulties for the U.S. government in international trade relations.”

So why does Congress continue to support farm subsidies, Smith asks? He points a finger at “crony capitalism.”

“The chairs and ranking members of those committees almost always come from districts and states in which farm families and agribusiness employees form substantial voting blocks, as do other committee members,” he argues.

For example, Mike Conaway (R-Texas), who serves a district rife with cotton and cattle production, is the current House agricultural committee chair, and his ranking member counterpart, Collin Peterson (D-Minn.), serves a crop-rich Red River Valley district.

It should be noted that there are fewer than 250,000 farms in Texas, which has a total population of around 27 million. Does that qualify as a “substantial voting block”? To Smith, the point is moot – that just makes farmers a “well-funded special interest group.”

“Congressional committees are content to implement otherwise inexplicably poor social policies for very long periods,” he concludes. “We should be less pleased.”

Do you feel farm subsidies have a bad reputation, or are they appropriately maligned? Continue the conversation in the comments below.

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Spell Check

byron martz
frederick , MD
1/19/2016 12:17 PM

  Divide the total subsidies by the number of people in the US. The country is built off the backs of farmers. The people complaining about farmers need to look at what they give back

Lincoln, NE
1/18/2016 11:59 AM

  Just wondering why subsidies began and if that reasoning is now obsolete ?

1/18/2016 08:21 PM

  Little known to most farmers is the fact the YOUR govt. is the true reason behind the outrageous costs of all of your inputs. If the govt. would get COMPLETELY out of controlling the Ag sector, and every other entity, and let them 'fend' for themselves, it would be a much more 'level' playing field. But it is way too late now because the govt. is the cause of 'corporate' farming and the BIG boys will NEVER let things go back to normal or "FAIR" for all.


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