The End of Farm Subsidies?

There's been some talk from the Obama administration about ending farm subsidies.
Here's a story from a week ago at The Salt, NPR's food blog.

These subsidies have been tough to justify for a very long time now.  Today's budget pressure (aka "The Pain Caucus" or "Austerity Now!") just might be able to break them.  But don't hold your breath.  These subsidies have been around since the Great Depression and while they've gently declined over time in importance, they've been tough to kill.

And the biggest subsidy of all is the implicit subsidy to grain farmers comes 50 cents/gallon given for corn-derived ethanol and the associated mandates.  There's some talk of ending the subsidy, but not the mandate.  And as long as the mandate is in place farmers will get their artificially high grain prices.  It  won't show up on the government books but it would remain just as distortionary.

I also hear the crop insurance subsidies will be expanded further, hence the reference to the "safety net" in the NPR article.

Comments

  1. With the economy so shaky, and Obama's electoral fortunes likely tied to it, seems like a risky time to take on the bipartisan might of the farm lobby...

    ReplyDelete

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