Do U.S. farm programs benefit consumers and the public at large, or do they subsidize and protect the few at the expense of the many?

“Farm programs are sold to the public as a way to help maintain the small family farm,” write agricultural economists E. C. Pasour and Randal R. Rucker in a new book, PLOWSHARES & PORK BARRELS: The Political Economy of Agriculture (The Independent Institute). “In reality, however, the programs confer most of the benefits on individuals whose wealth and incomes are considerably greater than those of the average taxpayer footing the bill,” say the authors.

In PLOWSHARES & PORK BARRELS, Pasour and Rucker offer a fascinating and systematic look at the byzantine wealth transfer program known as U.S. farm policy.

Government intervention in agriculture traces back to the creation of the land-grant colleges in the 1860’s, note the authors. But until the advent of the New Deal in the 1930’s, the government played a limited role in farm policy, focusing primarily on ways to increase the productivity of crop and livestock producers. The government’s role in U.S. agriculture increased dramatically under Roosevelt’s New Deal with the enactment of a multitude of farm programs that regulated the production and marketing of agricultural products.

Agricultural subsidies have expanded ever since, and farmers have remained among the country’s most effective special-interest groups. PLOWSHARES & PORK BARRELS offers an in-depth look at U.S. agricultural policy. The book begins with an examination of how the political process differs from the market process—and how this difference helps explain the overspending bias in agricultural policy and the persistence of profligate farm programs long after the nation recovered from the ruinous economic conditions of the 1930s. It then examines price supports, marketing orders, commodity programs, food stamp and other subsidized food programs, trade protectionism, crop insurance, subsidized credit, conservation programs, research and education programs, and taxation.

PLOWSHARES & PORK BARRELS explains why:

• Three-quarters of all government farm payments go to the largest 17 percent of U.S. farms.

• U.S. farmers have become more dependent on farm programs in the last decade.

• In 2004, the total value of export subsidies for farm products, including credit guarantees, was about $5 billion.

• Price supports and other farm programs increase food prices and do not increase farming’s long-run profitability.

Farm programs, say Pasour and Rucker, have not only failed to achieve their stated objectives, they are also frequently inconsistent. Price supports and food assistance programs, for example, often serve to increase product prices, whereas subsidized credit, conservation subsidies, subsidized crop insurance, and publicly financed research and educational activities, place downward pressure on product prices. The greatest irony of all, however, may be that the object of so much popular sympathy—the small, family farmer—ultimately receives very little of these government payments. The great bulk of U.S. farm spending goes to pork and corporate welfare.

PLOWSHARES & PORK BARRELS
The Political Economy of Agriculture
by E. C. Pasour, Jr. and Randal R. Rucker
Trade Paper, $22.95, 408 Pages, 42 Figures, 20 Tables, Appendix
Published by The Independent Institute
100 Swan Way, Oakland, California 94621-1428