The Sustainability of US Subsidies

Note: This webpage is for instructional purposes only and the scenario described below is fictional.

The Sustainability of US Subsidies

UW-Madison Task Force Members:
   Samantha Vosters, Department of Biology and Environmental Sciences
   April Hommerding, Department of Conservation Biology and Environmental Studies


Scenario | Proposal Overview | Proposal | Table of Contents | Section 1 | Section 2 | Section 3 | Section 4 | Section 5 | Section 6 | Section 7 | Section 8 | Section 9 | Section 10 | Section 11 | Section 12 | Section 13 | Citations | Acknowledgements | About the Authors

Scenario

We, members of the Sierra Club, have studied the United State’s agricultural subsidies and want to present our findings to the Conference Committee (Figure 1). As an environmental group that has helped pass the Clean Air Act, Clean Water Act, and the Endangered Species Act, we think that subsidies should be feasible, efficient, and effective in supporting environmental goals (Sierra Club, 2018). The Sierra Club has commissioned our team to explore these policies to determine the impact that subsidies have and determine alternatives to include benefits for the environment, farmers and consumers, and the government. To convince Conference Committee, the Senate, the House, and the President of the importance of adjusting subsidies to fulfill these goals, we have included the economical and social aspects of subsidies that could benefit the economy and social welfare of the United States.

Figure 1

slide2.jpgFarm Bill Legislation


Proposal Overview

Subsidies are a complex subject because they affect consumers and producers both directly and indirectly through systems including cost of production, national and international market fluctuations, and the relationship between agriculture and climate change.Subsidies are any payment that provides an incentive for a farmer to grow a specific crop or conduct a particular “best management practice” or to keep prices low for customers. These governmental payouts attempt a more stable market place so that uncontrollable events, such as droughts or extreme storms, do not put farmers out of business. This paper analyzes the sustainability of these subsidies. Sustainability will be analyzed under three categories: economics, environment, and society. This literature review has determined that the current subsidy system needs to be re-evaluated and adjusted to optimize all three categories. US subsidies favor mass production and maximum usage of land, leading to the depletion of resources, while promoting pesticide and fertilizer usage that has negative effects on the environment. The economic aspect of subsidies are supposed to support farmers to grow their business, while maintaining a stable market for consumers and producers. However, farmers may not want to produce the products that are being subsidized, while consumers cannot afford the products that are not subsidized, exacerbating the societal effect of subsidies. The agricultural subsidies have the potential to be an effective and efficient way to distribute financially attainable and nutritional products, but policy-makers need to shift the focus of the goals of subsidies towards sustainability.


H.R. 2642

One Hundred Fifteenth Congress

of the

United States of America

At The Second Session

Begun and held at the City of Washington on Thursday the twenty-sixth day of April, two thousand and eighteen

A Proposal

To provide for the reform and continuation of agricultural and other programs of the Department of Agriculture through fiscal year 2020, and for other purposes, such as, the increased sustainablity of the subsidies funded through the Agricultural Act

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

Section 1. Short Title; Table of Contents

(a) SHORT TITLE. - This Proposal may be cited as the "The Sustainability of US Subsidies".

(b) TABLE OF CONTENTS. - The table of contents of this Proposal is as follows:

Sec 1. Short title; table of contents.

Sec 2. Definition of Sustainability.

Sec 3. Definition of Wicked Problem.

Sec 4. Triple Bottom Line Model.

Sec 5. Definition of Subsidies.

Sec 6. Brief History of US Subsidies.

Sec 7. Description of the Methods utilized to justify proposed changes.

Sec 8. Evalutation of Environmental Applications of Subsidies.

Sec 9. Evalutation of Societal Applications of Subsidies.

Sec 10. Evalutation of Economic Applications of Subsidies.

Sec 11. Results of Study.

Sec 12. Limitations of Study.

Sec 13. Proposed ammendments.

Section 2. Definition of Sustainability

       In this Proposal, the term "Sustainability" means meeting the needs of the present without compromising the well-being of future generations, through environmental, economical, and societal aspects (Sustainability Degrees, 2018). The concept of sustainability is a complex, elusive, and wicked problem.

Section 3. Definition of Wicked Problem

       In this Proposal, the term "Wicked problems" mean the presence of: no definitive formulation of the problem of the inefficiency of subsidies, solutions are neither true nor false, and the stakeholders, namely farmers, consumers, and the government, have very different perspectives on this problem (Peterson, 2013). Underlying cause and effect relationships related to the problem are complex, systematic, and either unknown or highly uncertain.

Section 4. Triple Bottom Line Model

      In this Proposal, the term "Triple Bottom Line Model" means the interactions environmental, economical, and societal sustainability. The triple-bottom line illustrates that an activity or program is sustainable when it meets the goal of all three categories (Figure 2).

  1. This model allows for the analysis of activities to address their strengths and weaknesses.
  2. Figure 2

    triple-bottom-line-1.png Triple Bottom Line Model.

  3. The triple-bottom line is also displayed as a nested model, which shows how the subsequent categories are affected by the others
  4. (Figure 3).
    1. This model illustrates that the economy cannot be optimized until both the social and environmental aspects are maximized.

    Figure 3

    sustainability-nesting-solo.jpgTriple Bottom Line Nested Model.

Section 5. Definition of Subsidies

       In this Proposal, the term "Subsidy" is an economic benefit or financial aid provided by the government to support a desirable activity, keep prices of staples low, maintain the income of producers of critical or strategic products, maintain employment levels, or induce investment to reduce unemployment” (Amadeo, 2018).

  1. Subsidies are primarily an economic stabilizer designed to allow farmers to continue to produce their products without fear of market crash due to their risky employment environment.
    1. Historically, subsidies were implemented to support farmers as a risk management policy during the setup of the New Deal programs (Schapsmeier, 1992).
    2. Without subsidies, some farmers would not be able to take the risk of market failure where the costs are too low for efficient and effective crop production.
  2. Subsidies are not a ‘one size fits all,’ they vary from government to government and different subsidies benefit different sized farms.

Section 6. Brief History of US Subsidies

  1. The United States funds over 1,500 programs, spending almost $2 trillion across them, many of which relate to agriculture and nutrition (IDILOGIC, 2018).
  2. The United States Department of Agriculture (USDA) views agricultural subsidies as price support for farmers as well as a support program for consumers.
  3. Under Farm Storage Facility Loans, the USDA breaks down which products are eligible, namely corn, grain sorghum, wheat, oats or barley, along with, fruits and vegetables in cold storage facilities and unprocessed meat/poultry.
  4. In order for the farmer to be able to procure this loan, they need to be able to prove that they will be able to repay and meet the other requirements for the loan (McConnell, 2016).
  5. The government also has mandatory spending for organic agricultural products under the conservation, research, horticulture, and crop insurance titles (USDA, 2017).
  6. The United States subsidies do not just impact its citizens through the price of food, but also international markets and their citizens through price competition and food aid.

Section 7. Description of the Methods utilized to justify proposed changes

  1. Literature Review
    • Scholarly articles discovered using Web of Science
    • Articles analyzed for relevance to subsidies and their sustainability
    • Articles organized to address the environmental, economical, and societal sustainability of subsidies
    • Synthesis of articles through summary and critical evaluation provides another perspective on the value of subsidies in the US
  2. Interview with Professors
    • Paul Mitchell - Agriculture and Applied Economics Department at the University of Wisconsin- Madison
    • Questions asked
      1. What is the goal of agricultural subsidies?
      2. Do you think that consumers and producers are still benefiting from these programs?
      3. How are international markets affected by the subsidies in the US?
      4. Do you see any way for the subsidies to be more efficient and effective at reaching their goals?
      5. How do farmers feel about subsidies?
      6. Where can research of subsidies improve?

Section 8. Evaluation of Environmental Applications of Subsidies

  1. Environmental sustainability is determined by effects on:
    1. Natural resources
    2. Water and air quality
    3. Energy conservation
    4. Land use
  2. The environment can be affected in many ways by governmental subsidies:
    1. The Promotion of Biofuels
      1. The U.S. has biofuel subsidies as a result of an energy crisis
        1. Resulting from expensive fuel and environmental concerns, in the 1970s
        2. Increased U.S. energy independence through the use of alternative fuel (Gustafson, 2010).
        3. For biofuels to be a viable alternative, a biofuel should:
          1. Provide a net energy gain
          2. Have environmental benefits
          3. Be economically competitive
          4. Be producible in large quantities without reducing food product supplies
      2. Ethanol production is encouraged because:
        1. Viewed as environmentally friendly
        2. Improves individual state environmental scores by:
          1. Decreasing dependence on oil
          2. Lowering GHG-emissions from vehicles (Skidmore, 2013)
        3. Method of production (Figure 4) evaluates whether biofuels are reaching this goal:
        4. Figure 4

          biofuels-4.png Biofuel Production

          1. First generation biofuel production is less sustainable:
            1. Inputs and processes required:
              1. Machinery for planting and harvesting
              2. Fuel for the machinery
              3. Fertilizer
              4. Land
              5. Water
              6. Fermenters (ethanol)
              7. Etc.
            2. Increases the amount of corn or other crop needed to fulfill all market demands
          2. Second generation biofuel production are more sustainable:
            1. Efficient agriculture (Milazzo, 2013)
              1. Original product needs already met
              2. No need for additional inputs
        5. Biofuels ultimately produce less energy than fossil fuels:
          1. Filling a 25-gallon tank of an SUV requires over 450 pounds of corn, which contains enough calories to feed one person for a year (Runge, 2007).
          2. Greenhouse gas emissions are reduced 12% by the production and combustion of ethanol
          3. Greenhouse gas emissions are reduced 41% by biodiesel relative to the fossil fuels they displace
          4. However,
            1. Dedicating all U.S. corn and soybean production to biofuels would meet only 12% of gasoline demand and 6% of diesel demand (Hill, 2006).
              1. Does not including other needs for energy such as electricity
        6. Subsidy programs only address biofuels and GHG-emissions in relation to transportation (USDA, 2017):
          1. Renewable Fuel Standard (RFS)
          2. The Second Generation Biofuel Producer Tax Credit
          3. The Bioenergy Program for Advanced Biofuels (BPAB)
    2. Crop Production Methods
      1. Fertilizer is an important aspect of farming, allows for maximum yield (Stuart, 2014)
        1. Trade-off:
          1. Fertilizer use can lead to:
            1. Harmful environmental effects:
              1. Polluting agricultural runoff
              2. Contributing to overall soil degradation
      2. The problem with row crops:
        1. Top most subsidized
          1. In terms of the total subsidy dollar amount
        2. Receive over 60 percent of chemical fertilizer used in the U.S. (Runge, 2007)
          1. Over use of fertilizer leads to:
            1. Areas of depleted dissolved oxygen in the aquatic environment that it can no longer support life
              1. The dead zone in the Gulf of Mexico (NOAA, 2017)
      3. The shift to larger corporate farms in the 1950’s has coincided with (EPA, 2015):
        1. Use of chemical fertilizers
        2. Modern agricultural practices
          1. Increased intensification (Figure 5)
          2. Figure 5

            corn,wheatandriceproduction-5.png

            Staple Crop Production

          3. Increased use of synthetic fertilizer (Figure 6)
          4. Figure 6

            commercialfertilizer-6.png

            Commercial Fertilizer Use

          5. Decrease in number of U.S. farms (Figure 7)
          6. Figure 7

            ConsolidationofUSAg-7.jpg

            Consolidation of US Agriculture

    3. Conservation Promotion
      1. Important to address how the Farm Bill works to promote conservation and reflect the U.S. environmental agenda
        1. The USDA promotes conservation on farms through:
          1. Voluntary incentive programs under the Farm Bill
            1. Provides financial assistance to agricultural producers to improve their environmental performance
              1. Affecting soil quality
              2. Water quality
              3. Air quality
              4. Wildlife habitat
              5. Greenhouse gas emissions
        2. Five programs receive more than 95% of all USDA conservation program spending (USDA, 2017)
          1. Conservation Reserve Program (CRP)
          2. Conservation Stewardship Program (CSP)
          3. Agricultural Conservation Easement Program (ACEP)
          4. Environmental Quality Incentives Program (EQUIP)
          5. Regional Conservation Partnership Program (RCPP) (Claassen, 2016 and Table 1)
        3. Programs act to serve as an agreement to comply with the conservation efforts for the agricultural producers who are receiving the government money
        4. Programs appear to be influential in their goals, but
          1. Only about 6% of Farm Bill spending goes towards these programs
          2. Agricultural producers tend to opt out of conservation programs

Section 9. Evaluation of Societal Applications of Subsidies

  1. Societal sustainability involves:
    1. Community
    2. Education
    3. Equity
    4. Social Resources
    5. Health
    6. Well-being
    7. Quality of Life
  2. Subsidies provide a framework for the production and consumption of food through effects on pricing
    1. Citizens are affected by subsidies through:
      1. Food Programs
        1. Impact on Human Health
          1. The Supplemental Nutrition Assistance Program (SNAP) subsidizes vegetables to make them more affordable to low income families (Choi, 2017).
            1. Not a one-size-fits all solution to healthy eating
            2. Lead to major food security issues (Cong, 2012)
            3. The Farm Bill contributes about 80% of its spending to nutrition programs (Figure 8)
            4. Figure 8

              BreakdownofFarmBill-10.png

              Farm Bill

              1. Taxing unhealthy foods to make them less financially attractive
                1. Not a viable option for low income families (Alston, 2016)
            5. Healthy foods are made more affordable to low income families through SNAP (Choi, 2017)
              1. The 45.5 million participants are at or below 130% of the Federal Poverty Level
              2. 76% going towards households with children
              3. 11.9% to households with disabled persons
              4. 10% to households with senior citizens (USDA, 2016)
          2. Promote nutritional, balanced diets
            1. Increase healthy food consumption
            2. Decrease chronic diseases:
              1. Diabetes
              2. Heart disease
              3. Stroke
              4. High blood pressure
              5. Obesity (Figure 9)
              6. Figure 9

                Subsidiespromoteobesity-9.png

                Subsidies and Obesity

          3. The “most obvious” link between the Farm Bill and human health is nutrition (Krueger, 2011)
            1. More than half of Americans’ calories come from subsidized foods
              1. The people who ate the most had (Oaklander, 2016):
                1. A 37% higher risk of being obese
                2. A 41% greater risk of having belly fat
                3. A 34% higher risk for having signs of elevated inflammation
                4. A 14% higher risk of having abnormal cholesterol
            2. Foods that are easier to access and afford are the ones that people are more likely to incorporate into their diets
              1. Leads to food insecurity (Cong, 2012)
              2. The food being promoted(subsidized) by the government does not follow its recommended guidelines for diet
                1. Contradiction between what the government tells Americans to eat versus the foods they make cheap and available
      2. Impact on Farmers
        1. Subsidies cause overproduction of staple grains, which are unhealthy in the amount that they are consumed by the US public
          1. Precursor ingredients for processed, unhealthy foods
        2. Grains are over-consumed because they are cheaper to purchase
          1. Compared to fresh fruits and vegetables
        3. Encouraging the production and consumption of non-staple foods for lower income Americans, may be an effective solution in deterring the rising rate of chronic illnesses such as obesity and cardiovascular disease
          1. Speciality crops receive 4.7 billion dollars in subsidies compared to the 39.6 billion dollars that commodity crops receive (Figure 10)
          2. Figure 10

            FarmBillFacts-11.png

            Farm Bill Facts

          3. Tax foods that are high in calories, sugar, and fats (Alston, 2016)
          4. Subsidies on healthier foods significantly increase the purchase and consumption of those products(An, 2013)
        4. Subsidies support farmers in bad income years (Mitchell, 2018)
        5. Farmers are more financially stable than they used to be (Edwards, 2016)
          1. However, not allowing a free market for farmers to compete for better prices, via supply and demand.
      3. Possible solution:
        1. Cut back on subsidy payments, redistribute where needed
      4. Possible Result:
        1. Reinstate a basic market back into the agricultural system
          1. Allowing for consumer power and demand to play more of a role in the market rather than political power and funding

    It must not be overlooked that larger, corporate farms are dominating the system and although farmer salaries may be stable, it may not include those farmers that have been put out of business. Subsidies must cut back and redistribute accordingly.

Section 10. Evaluation of Economic Applications of Subsidies

  1. Economical sustainability involves a balance between financial bottom lines, efficient use of tax dollars, and affordable prices for consumers
    1. Influenced by:
      1. Lobbying
      2. Financial power
      3. Consumer interests
    2. Relies on:
      1. Farmer decisions
        1. Influenced by:
          1. Available subsidies
            1. Top grossing farmers get majority of subsidies (Degorter, 1993) (Figure 10)
            2. Figure 10

              FarmBillFacts-11.png

              Farm Bill Facts

            3. Mandatory spending on organics (Figure 11)
            4. Figure 11

              OrganicAg-16.png

              Organic Farms

          2. Equipment
          3. Risk
            1. Distorted Market (Edwards, 2016)
              1. No longer supply and demand
                1. Results in:
                  1. Overproduction
                  2. Distorted crop choice
                    1. Corn
                    2. Grain sorghum
                    3. Wheat
                    4. Oats
                    5. Barley
          4. The Farm Act has insurances to support farmers
            1. Much of the Act goes to Nutritional programs
              1. The aim of the Farm Act:
                1. Strayed from its original goal
                  1. Promoting farms to produce more
                2. Now
                  1. Allows for interests in:
                    1. Renewable energy
                    2. Conservation
                    3. Nutrition and the SNAP program (Farm Policy Facts, 2018)
            2. Corn and feed are the most subsidized crops, due to lobbying and political influence (Figure 12)
            3. Figure 12

              USFarmSubsidies-18.png

              US Subsidies

              1. Overproduction of corn began with the Great Depression
                1. Lead to significant production distortion (Farm Policy Facts, 2018)
              2. Important to the economics of the US
                1. Due to its presence many products:
                  1. High fructose corn syrup
                  2. Ethanol
                  3. Animal feed
              3. Lobbying done by (Farrell, 2017 and Runge, 2007):
                1. Large agro-businesses
                  1. Monsanto
                  2. Archer Daniels Midland Company (ADM)
                  3. Farmers
            4. Subsidies are made out to be economically profitable and sustainable
              1. Can be harmful to small farmers and beneficial to those with large market power (Saitone, 2008)
                1. Small farms depend on government support, but receive only a small share of the total payment (Cong, 2012)
      2. Goals of subsidies
        1. Influenced by:
          1. Lobbying
          2. Political influence
        2. Agricultural subsidies are established to ensure that farmers are able to afford assets
          1. There are eight types of farm subsidies (Edwards, 2016) see Table 2 and Figure 13:

            Figure 13

            USAgsubsidies-17.png

            US Subsidies Breakdown

            1. Insurance
            2. Agricultural Risk Coverage (ARC)
            3. Price Loss Coverage (PLC)
            4. Conservation Program
            5. Marketing Loans
            6. Disaster Aid
            7. Marketing and Export Promotion
            8. Research and Other Support
        3. Subsidies should ensure that crops and other products will be profitable, while maintaining stable prices for consumers
          1. These subsidies are not fulfilling their economical goal for farmers, the government, or consumers.
            1. The farmers abroad do not benefit from the subsidies in the US
              1. Market distortions
              2. US crops flood their markets
            2. Domestic farmers benefit from the subsidies shielding them from risks
            3. The Farm Bill 2014 has increased in cost by 49%, since its 2008 version and will likely continue to increase (USDA, 2017)
              1. US continues to attempt to reduce its debt, the funding for the Farm Bill should be re-evaluated
          2. Market distortions have lead to vary food prices for consumers both domestically and abroad
      3. International trade
        1. Lower the global prices of staples
        2. Result in tighter supply controls (Fisher, 1992)
        3. Globally rising corn prices result of:
          1. The biofuel industry's demand for corn
            1. Increased prices result in (Runge, 2007):
              1. Food insecurity
              2. Hunger
        4. Trade relations with other countries can be sabotaged by:
          1. Blocking the economic growth of developing countries
            1. Through the blocking free trade and undermining the price of goods (Edwards, 2016)
        5. Food aid can cause:
          1. Food insecurity for the country aided
          2. Farmers in the aided country to go out of business
            1. Supplied food is cheaper than local food
        6. Subsidies
          1. Oversimplify the dynamics of rural relations and marketing
          2. Ignore the underlying problems associated with poverty and food insecurity (Breslin, 1994)
  2. Subsidies provide a way for the government to finance the risks that farmers experience due to environmental disasters and crop failure, as well as promoting production of certain crops, and reducing customer prices

Section 11. Results of Study

      The studies analyzed in this paper found that only six of the twenty-one articles analyzed found the current subsidies sustainable in at least one aspect. Subsidies do not fulfill the triple bottom line model, but they have the potential to be evironmentally, econmically, and socially sustainable.

      The findings in this study are important because the goals of the subsidies in the US are not being met and in some cases are causing more harm than good. The subsidies need to be adjusted to meet the needs of farmers and consumers to affect positive change on national and international markets.

Table 1: Five Programs that Fund Conservation Programs

Program What does it do? How?
Conservation Reserve Program Pays producers to take land out of production

Keeps grasslands in grazing use rather than tilling or converting it for other use

Planting grass or trees on land previously used for crop production

Conservation Stewardship Program Pays producers to improve land already in production

Supports producers with a high level of stewardship for ongoing and new conservation practices

Agricultural Conservation Easment Program/td> Pays producers to keep land out of development to promote preservation/td>

Preservation of wetlands and protection of agricultural land from commercial or residential development

Environmental Quality Incentives Program Pays producers to implement conservation practices on land already in production

Conservation practices: nutrient management, conservation tillage, field-edge filter strips, and fences to exclude livestock from streams

Regional Conservation Partnership Program Pays producers with project-specific partnerships to solve a conservation problem

Project-specific, conservation efforts. Conservation project dependent on the regional land or watershed needs.



Table 2: Summary of agricultural subsidy types. Source: Edwards (2016).

Types of Agricultural Subsidies Overview/Goals
Insurance Largest farm program, covers more than 100 crops
Agricultural Risk Coverage (ARC) Pays subsidies to farmers if their revenue per acre falls below a benchmark, more than 20 crops covered
Price Loss Coverage (PLC) Pays subsidies based on average national price of particular crop compared to the crop’s reference price, covers more than 20 crops
Conservation Programs Pays farmers to keep millions of acres of their lands out of production
Marketing Loans Delivers higher payments to farmers when market prices are low, originally was meant to give farmers a loan at harvest time so they could hold their crops to sell at a higher price later
Disaster Aid Distributes additional aid after adverse events
Marketing and Export Promotion Promotes farm and food activities, including promotion of products in 93 foreign offices
Research and Other Support Funds research and other experts to aid the agriculture industry, for agriculture, food, statistical, and economic studies


Table 3: Article summary of the sustainability of subsidies.

Article Environmentally Sustainable Economically Sustainable Socially Sustainable
Alston, J. M., et al. (2016) - - No, but have potential to improve health outcomes
An, R. P. (2013) - - No, but have potential to improve health outcomes
Beghin, J. C. and H. H. Jensen (2008) - - Yes, sweetener consumption declines through price increases
Choi, S. E., et al. (2017) - - Yes, positive health outcomes
Cong, R. G. and M. Brady (2012) No, Greenhouse gas emissions No, inefficient for supporting farmers’ incomes No, inefficient for food security
de Gorter, H. and D. R. Just (2010) No, Greenhouse gas emissions No, impact on corn prices and discriminate trade -
Degorter, H. and E. O. Fisher (1993) - No, small farms not supported -
Devadoss, S., et al. (2016) - No, effects on trade -
Fisher, E. O. and H. Degorter (1992) - Yes and No, lowers world prices, but also decreases exports -
Hoffman, W. L., et al. (1994) - - No, food aid has social cost
Lusk, J. L. (2017) - Yes and No, effects on trade varies by region -
Mozaffarian, D., et al. (2014) - No, poor health impacts workforce No, negative health consequences of poor nutrition
Pearson-Stuttard, J., et al. (2017) - - No, negative health effects
Penalvo, J. L., et al. (2017) - - No, negative health effects
Roberts, K. E., et al. (2017) - - No, influencing health through cost
Runge, C. F. and B. Senauer (2007) No, “greenness” of biofuels questionable No, effects trade No, people are going hungry
Saitone, T. L., et al. (2008) - No, market power in hands of few -
Skidmore, M., et al. (2013) - No, ethanol policies only adapted when profitable -
Stuart, D., et al. (2014) No, but subsidies can be used to mitigate Nitrogen pollution - -
Thow, A. M., et al. (2010) - - No, health impacts
Total Sustainability 0 Yes, 4 No 2 Yes, 10 No 3 Yes, 10 No


Section 12. Limitations of Study

      Limitation 1: All articles found via the University of Wisconsin-Madison library, which may have bias towards the promotion of healthy, non-staple foods and environmental health.

      Limitation 2: No studies have directly researched the sustainability of subsidies under the triple bottom line model.

      Limitation 3: There is a lot of information on subsidies and this study was not able to include all of it.

      Limitation 4: Subsidies are a very complex, Wicked Problem, readers are encouraged to reference the sources provided to find more information.

Section 13. Proposed Ammendments

      Subsidies have the potential to be environmentally, economically, and socially sustainable, but these policies need to be re-evaluated to better reach these goals. Majority of the studies found subsidies to be unsustainable in all three categories. These results show that agricultural subsidies in the United States need to be analyzed and re-focused on the goals that they set out to promote. By incorporating the idea of sustainability, the government will be able to allocate their resources effectively and efficiently, improving the environment, economy, and societal standing of the United States. Future research can focus on specific subsidy programs to analyze their individual sustainability (Figure14).

Figure 14

Sustainabilityofsubsidies-20.png

The Sustainability of US Subsidies

      Environmental Aspects: The government should look into the sustainability of using first generation versus second generation biofuels. Second generation biofuels may decrease the competition that biofuels have on production of food, as well as increase the net gain of energy compared to first generation biofuels. The Farm Bill currently dedicates about 8% of its funding to conservation programs, however, with the increasing need for conservation, this percentage should increase in the next Farm Bill. Additionally, the amount of fertilizer used should not be in excess, due to the harmful environmental effects it may have if contaminated into waterways and the degradation of the soil. Therefore, there could be some sort of financial incentive to use only as much fertilizer as needed, to avoid overuse, waste, and unnecessary harms.

The environmental pillar of sustainability can be improved by addressing:

  1. Title 2, Subtitle c: The Environmental Quality Incentives Program
    1. Include additional incentives to:
      1. Use the proper amount of fertilizer
      2. Mitigate the damaging effects of runoff and soil degradation
    Title 6, Subtitle a
    1. Improve environmental sustainability through:
      1. Promotion of rural businesses
      2. Waste treatment to avoid water pollution
      3. Reduce market distortion
  2. Title 9, Section 9010
    1. Encourage the conservation of energy through:
      1. Promotion of research
      2. Use of second generation biofuels

      Social Aspects: The government should re-evaluate the contradicting goals of their healthy nutrition guidelines and the most heavily subsidized food crops. If the government has goals and guidelines for America to eat healthier in aim to decrease the rate of increasing chronic disease, the funding of the Farm Bill should reflect that goal by allocating funds to food crops that do not get processed into unhealthy food options. Although the Farm Bill is successful in funding the SNAP program, this program only encourages choice and does not guarantee that healthier foods will be purchased. There are programs through SNAP such as double dollars for fresh produce, but ultimately it is the consumer choice, which is financially influenced. If fresh produce was cheaper to begin with, the consumer may be more likely to purchase the fresh produce as it is price competitive with the other cheaper, processed foods that are heavily subsidized.

The society pillar of sustainability can be improved by addressing:

  1. Title 3, Subtitle a, Section 3008
      Encouraging the understanding of the sensitivity of the markets affected by food aid
  2. Title 4, Subtitle a
    1. Encourage healthy eating
      1. Encourage consumers to buy healthy foods through:
        1. Incentives to purchase healthy foods
        2. Improving food availability
        3. Education of healthy diets

      Economic Aspects: The Farm Bill needs to support farmers while providing affordable healthy food to consumers. Subsidies need to be re-distributed to support all farm types and a diversified crop production. The government needs to ensure that the needs of small farmers are being met, despite the pressure from large companies to continue ‘business as usual’. While the market will remain distorted as long as subsidies exist, the Farm Bill can establish a more equitable flow of funds to support farm production while monitoring the demand of consumers to provide a more stable, demand-reflected market. The international impacts of subsidies can also be addressed in the upcoming Farm Bill, the government should be aware of the aftermarket effects of food aid and overproduction. The United States should continue to supply countries in need with food aid, but also support their farmers to encourage regrowth and food independence. the economic pillar can work more efficiently if subsidies “[lower] the income and total payment limits so the large/rich [farms] do not get as much of the ag[riculture] support” (Mitchell, 2018).

The economic pillar of sustainability can be improved by addressing:

  1. Title 11, Sections 11005, 11016, and 110022:
    1. Redistribute agriculture subsidies
    2. Include equitable shares of subsidies for farmers
    3. Encourage production of non-staple crops (cover crops)
    4. Continued research for improved farm practices

      By making these amendments to the Farm Bill, Congress will begin to increase the sustainability of subsidies. As the Conference Committee, it is your duty to emphasize the findings of this study and continue to make changes to ensure that the subsidies provided by this government are sustainable for future generations.


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Acknowledgements

      This project would not have been possible without the support of Professor Paul Mitchell, Professor Wattiaux, Ginny Moore, and our peers.


About the Authors

Samantha Vosters: From Chippewa Falls, WI studying Biology and Environmental Sciences and a Certificate in Global Health at the University of Wisconsin-Madison.

April Hommerding: From Sun Prairie, WI. Studying Conservation Biology and Environmental Studies at the University of Wisconsin-Madison.




Keywords:sustainability, subsidies, economic, environment, society, government, farm bill   Doc ID:80718
Owner:Michel W.Group:DS 471 Food Production Systems and Sustainability
Created:2018-03-08 11:02 CSTUpdated:2018-04-26 14:24 CST
Sites:DS 471 Food Production Systems and Sustainability
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