Ag Subsidies Revisited
I observed yesterday that even though agriculture subsidies are typically discussed as a canonical example of special interests controlling the political process, proposals to curtail the subsidies don’t actually poll very well suggesting a broader political problem. Tom Laskaway responds that the question was worded very generically and people probably don’t understand what’s actually being subsidized.
That’s probably true, but the public rarely has a particularly nuanced discussion of the issues they’re asking poll questions about. My only point was that this issue is often discussed among high-information people as if a politician who ran around the country saying “I’m going to cut agriculture subsidies!” would be greeted with widespread applause, albeit defeated by special interest politics in the Senate. The available evidence, though somewhat meager, suggests that this may not actually be the case. Instead, the farm lobby has its teeth not only in the congress but into the brains of the public, who seem to understand “farm subsidies” to mean something wholesome and good rather than endless rivers of corn and soybeans being transformed into processed foods at enormous cost to the environment and public health.
21 Responses to “Ag Subsidies Revisited”
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March 20th, 2009 at 1:25 pm
Yeah, people like small farmers. If you had a reform policy that said we are going to cap payments to limit subsidies to small farmers (and also sold the thing to elites as a way to rationalize the process as well as get rid of some distortions) you could probably get a lot more support–even though the Ag Lobby (muhahaha) would oppose it.
March 20th, 2009 at 1:38 pm
Cheap food policies are persistently and widely popular, and have been for some time. “A chicken in every pot.” Panem et circenses.
March 20th, 2009 at 1:41 pm
joel hanes:
I think it kind of constructed nostalgia and a sense of farmers being an important part of some ideal America more than understanding subsidies=cheaper food. At least that is the impression I gather when talking to average people about the issue.
March 20th, 2009 at 1:46 pm
P.S. That is not to say that if an actual subsidy cut were proposed and the Ag Lobby campaigned against it saying it would increase the cost of food that many people wouldn’t give that as a reason they opposed it. But outside of a situation like that, I find, having taken economics classes with even above-average people who just don’t think like that, that people don’t tend to be very good at thinking about policy in terms of economics.
March 20th, 2009 at 1:46 pm
The Farm Lobby is EATING MY BRAINS!!!
March 20th, 2009 at 1:46 pm
I think there’s also a fair amount of “food security” nonsense floating around in the public consciousness, tied into some vague notion that food production is strategic and therefore we need to subsidize it.
March 20th, 2009 at 1:48 pm
Jimbo: I agree with that. That is another concern a lot of people seem to have.
March 20th, 2009 at 1:50 pm
The farm lobby (and to a large extent USDA) have made a point of selling these subsidies as protecting family farms, which is what I suspect people are thinking about when they answer those kinds of questions. The fact that they protect the opposite of family farms would be surprising to most.
March 20th, 2009 at 2:00 pm
Raivo Pommer
raimo1@hot.ee
Schwacher Dollar-Bank Fed
Der Dollar ist unsere Währung und euer Problem,“ nach diesem altbekannten Motto versuchen sich die Vereinigten Staaten wieder einmal aus der selbst verursachten Wirtschafts- und Finanzkrise zu mogeln.
Die Ankündigung der amerikanischen Notenbank Fed am Mittwochabend, Staatsanleihen über 300 Milliarden Dollar sowie hypothekenbesicherte Wertpapiere über 750 Milliarden Dollar zu kaufen, hat die Kurse für Staatsanleihen deutlich steigen lassen, dagegen den Dollar stark fallen lassen.
Dollar wertet in wenigen Tagen mehr als fünf Prozent ab
Waren am Mittwochmorgen noch 1,2987 Dollar nötig gewesen, um einen Einheit der europäischen Einheitswährung Euro erwerben zu können, so waren am Freitag bis zu 1,3738 Dollar nötig. Das entspricht einer Abwertung von rund 5,5 Prozent in gerade einmal zwei Tagen.
March 20th, 2009 at 2:06 pm
Ag subsidies help keep the price of Cheetos low, thereby indirectly subsidizing the blogging industry.
March 20th, 2009 at 2:07 pm
This is one of those times when I think “special interests” becomes a short hand for dynamics people don’t really understand, and becomes one of the reasons arguments are so ineffective. A much more simple reason for the dynamic is that, in a lot of states, a lot of people work not just as farmers but in farming related industries. Even more people probably have friends or relatives working in some agricultural related job. So, as a general rule, they’ll tend to be largely sympathetic to agricultural subsidies. And when most arguments against the subsidies peg its support to “special interests,” the natural reaction is “well I support it, and I’m not a special interest, so clearly this person has no idea what they’re talking about,” which only further reinforces the position.
March 20th, 2009 at 2:16 pm
Kautsky lives!
March 20th, 2009 at 2:22 pm
I am going to take personal credit for this last bit of insight that nicely rounds out Matt’s post. Not that Matt didn’t already know this stuff, but it was missing from his original post and was exactly the gist of my comment to that post.
Bless you all.
March 20th, 2009 at 2:26 pm
Too busy to look it up at the moment, but If I’m not mistaken farm subsidies have shrunk over the years as a percentage of GDP. I’d prefer they go to zero, but at least they’ve mostly been moving in the right direction.
March 20th, 2009 at 2:28 pm
Of course, the subsidies are killing small farmers (like my wife’s family in Iowa), while big agro uses it leverage to choke the nascent organic foods movement. It might actually be worth discussing a subsidy policy that rewards farmers for growing healthy, sustainable food rather than growing so much food that the environment is raped and corn is dumped into every product imaginable (and some unimaginable ones, magazine gloss, wow).
March 20th, 2009 at 2:34 pm
The available evidence, though somewhat meager, suggests that… the farm lobby has its teeth not only in the congress but into the brains of the public
Yeah, it’s a cultural thing. Family farm, Smallville, spacious skies and amber waves of grain, the same as-if-acres-could-vote mentality that gives undue importance to the size of red states on maps, Washington as Cincinnatus… Purely by coincidence, I pull a quarter out of my pocket right now, and it’s a Wisconsin state quarter: on the tail side there’s a cow, a wheel of cheese and an ear of corn.
Also, the average American may overestimate how good the status quo is in agriculture, but the technocrats you’re talking about probably underestimate the industry’s importance. About 2 percent of Americans work in agriculture, so it doesn’t seem that big, but it effects more than just those who actually spend their days on farms. How many businesses make money off those processed foods?
Bloggers I generally agree with criticize ad subsidies and I usually keep quiet because even though the arguments make sense, I’m from Vermont. Ag policy is the third rail of politics up there.
On preview, other people have said a lot of this more succinctly. Oh well.
March 20th, 2009 at 5:12 pm
I believe there’s an anecdote in either Bob Woodward’s or George Stephanopulous’ book about the early years of the Clinton administration, in which budget director Alice Rivlin advises Clinton that after welfare reform, he should tackle “welfare for farmers”. Clinton shot her down, saying the programs were tremendously popular.
And both of them are right– Rivlin on the merits, Clinton on the politics.
March 20th, 2009 at 5:45 pm
There was a time when the argument against subsidies was that farmers were getting payed to not grow crops.
March 20th, 2009 at 7:17 pm
Ag subsidies have popular support because 1) hardly anyone among the 98% of Americans who don’t live on farms knows what they are or what they do, and 2) they are very easy to sell to people who don’t know what they are or what they do. It’s very easy to make the logical leap from “agriculture means food, subsidies mean lower prices, hence agricultural subsidies mean cheaper food, which is good.” Or more simply, “food is good, so anything the government does to make sure there is more of it is good.”
Also, and probably more importantly, the American romance of the yeoman farmer has not yet caught up with the reality that hardly any such people exist anymore, and as others have noted, people mistakenly believe that ag subsidies benefit small farmers. The Marxists would say this is a prime example of the reactionary peasant mentality of late capitalism, along with the “ownership society” and other popular fantasies of equitability in land ownership.
Wiley, that argument was correct until 1996 when the new Farm bill ended the practice of government supply control.
David (#1), you could never, ever sell that idea to the elites; they are being paid very well not to ever support such a policy.
March 20th, 2009 at 9:13 pm
Thanks for the info, Jonah.