Agricultural policy in the United States is interventionist,expensive, inequitable, and damaging to American interestsabroad.Over the last 20 years, the opportunity cost to Americanconsumers and taxpayers of supporting agricultural producers hastotalled over $1.7 trillion.The harm to agricultural producersabroad, including many developing countries, does not help U.S.foreign policy. American intransigence over reducing farm subsidiesis a significant impediment to a successful conclusion to the Doharound of world trade talks. It is time for the government to getout of the business of managing agricultural markets and supportingthe incomes of farmers, many of whom are relatively well‐to‐do.
Removing barriers to agricultural imports will provide cheaperfood for consumers and inject competition and dynamism intoagricultural markets. Democrats took Congress partly by criticizingfiscal irresponsibility. Dismantling farm income support programsis a perfect opportunity to make good on the promise to makechanges for the better.
Because the first‐best solution of completely ending farmprograms as of September 30, 2007 – with no compensation ortransition payments – is politically infeasible, we advocate thatthe government buy out the damaging and expensive support forfarmers by paying them a fixed amount of money, which they would befree to spend as they wish. Although it would require largeup‐front outlays, a politically expedient buyout of agriculturalsubsidies and trade barriers, with concrete steps to ensure thechanges are permanent, would be a worthwhile investment. The 2007Farm Bill provides an opportunity for less government interferencewith rural America.