Cato Policy Analysis No. 135 July 12, 1990

Policy Analysis

Farm Bill Follies of 1990

by James Bovard

James Bovard is an associate policy analyst of the Cato Institute and the author of The Farm Fiasco (ICS Press, 1989).


Executive Summary

Congress is in the process of legislating another five years of subsidies for farmers. Taxpayers will probably be forced to pay another $100 billion or more in farm aid, and consumers will pay another $50 billion or more in higher food prices if Congress extends existing subsidy programs another five years. That will mean spending the equivalent of more than $400,000 for every full-time farmer in the United States.

During the 1980s taxpayers and consumers shelled out $260 billion to support America's farmers. Farm programs are currently costing roughly $20 billion a year plus $10 billion in higher food prices--or more than $80,000 for each full-time farmer. Almost all of that cost is a dead loss to the American economy. Yet the U.S. Department of Agriculture will reward farmers for idling almost 60 million acres this year--the equivalent of shutting down all the crop land in California, Colorado, Kentucky, Louisiana, Montana, and Wisconsin. There is nothing to show for the outlays except idled acres, polluted groundwater, and richer farmers. While congressmen justify providing tens of billions of dollars in farm aid to assure "food security," the USDA admits that, without government intervention, food prices would fall by 12 percent.[1] The average farmer is far richer than the average American family, and farm aid increasingly means oppressing the poor to further enrich the wealthy.

But the Bush administration and congressional farm policymakers appear to agree that the 1985 farm bill has been a big success. President Bush said of it: "Admittedly, the cost has been high, but it has worked."[2] But our current farm programs have institutionalized shutting down much of American agriculture to drive up prices--paralyzing the efficiency of farmers by effectively prohibiting crop rotation and creating export subsidy programs that burn tax dollars almost as fast as the Internal Revenue Service can collect them. The House Agriculture Committee, in the farm bill it finished on June 14, has essentially voted to continue existing farm programs for five more years.

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