WASHINGTON -- With the 2002 farm bill set to expire in September, agricultural lobbyists, farmers' advocacy groups, and bureaucrats are chomping at the bit to make this year's bill the biggest and priciest yet. But a new study from the Cato Institute proposes a radical overhaul of a program that's long overdue for reform.
In the study "Freeing the Farm: A Farm Bill for All Americans," Sallie James, trade policy analyst with Cato's Center for Trade Policy Studies, and Daniel Griswold, the Center's director, provide a pragmatic solution to the farm bill's many failures. In a fresh take on eliminating farm subsidies, James and Griswold propose a one-time buyout payment to farmers that would end agricultural subsidies and eliminate tariffs for once and for all.
Acknowledging the highly politicized nature of the farm debate, they concede that a compromise must be made. "Ideally, decades of bad policy would require no buyout of any kind, and repealing the legislation that enables farm programs could occur overnight with the expiration of the 2002 farm bill. Political realities, however, are such that some sort of transition mechanism and payments are likely needed in order to achieve reform," argue the authors.
Americans pay many times over for the farm bill's myriad subsidies -- through higher prices for consumers, through tax dollars, and in international esteem with trading partners, who accuse Washington of hypocrisy in trade negotiations. Eliminating tariffs and trade barriers would benefit the nation.
"The cost of the U.S. farm program is a significant drain on the economy," they write. "Reforming it unilaterally, by removing import barriers, domestic price supports, and the institutional infrastructure for continuing taxpayer-funded agricultural support, is a policy that is overwhelmingly in the wider national interest. A new farm bill should guarantee that Americans will not be on the hook for another $1.7 trillion or more during the next two decades."