Class Activity: Q&A — U.S. Food Policy (Farm Bill) — Food Stamps, Farm Subsidies, and Trade Barriers
The Farm Bill is a piece of federal legislation that that has been passed every 4-5 years since the days of the Great Depression in mid 1930s. Interestingly, the Bill has traditionally received bi-partisan support because it includes both the Food Stamp (referred to as the Supplemental Nutrition Assistance Program or "SNAP") supported by liberal politicians and farm subsidies, typically supported by conservative politicians. Not everyone, however, would argue that this bi-partisanship has done good for the country and the world. Read more and learn more !
Food for thought on U.S. Food Policy, Food Stamps and Farm Subsidies:
- The Insanity of Our Food Policy (by J.E. Stiglitz, NY Times November 16, 2013) highlights the contradictions of the U.S. Food Policies and some of its consequences: American food policy has long been rife with head-scratching illogic. We spend billions every year on farm subsidies, many of which help wealthy commercial operations to plant more crops than we need. The glut depresses world crop prices, harming farmers in developing countries. Meanwhile, millions of Americans live tenuously close to hunger, which is barely kept at bay by a food stamp program that gives most beneficiaries just a little more than $4 a day.
- Agricultural Subsides (by C. Edwards, CATO Institute, June 2009) identifies and discuss eight types of farm subsidies and six reasons to repeal them:
- Direct Payments,
- Marketing Loans,
- Countercyclical Payments,
- Conservation Subsidies (Conservation Reserve Program, "CRP"),
- Disaster Aid,
- Export Subsidies.
- Farm Subsidies Redistribute Wealth
- Farm Subsidies damage the Economy
- Farm Programs Are Prone to Scandal
- Farm Subsidies Damage U.S. Trade Relations
- Farm Programs Damage the Environment
- Agriculture would Thrive without Subsidies
- The EWG ("Environmental Working Group", which is involved in the negotiation of the Farm Bill) publishes farm subsidies data for the United States and individual states including Wisconsin. According to this database between 1995 and 2012, there has been 46,642 recipients of the dairy program subsidies in Wisconsin for a total dollar amount of 1,103,430,435 dollars, or on average more than 61 millions dollars per year over that 18 year-period. These dollar amounts are, however, much lower that subsidies for corn and much lower than subsidies to other agricultural states (explore the database for yourself !).
- The APECSEC (Asia-Pacific Economics Blog) has its own take on the Pros and Cons of farm subsidies.
- Other policies that government can put in place to meet national goals are "trade barriers". Note that every government "plays" those trade barriers in both directions. On the one hand they may impose barriers to imports (to "protect" domestic agriculture from international competition) while negotiating with other countries to lower their own barriers (to "stimulate" agricultural export and expand to new markets). Here is just but a partial its of trade barriers:
- Import Quota,
- Import Tariff,
- Non-Tariff Barriers:
- Phytosanitary restrictions (see corn and soybean example here)
- Trademarks or any other form of "Designation of Origin" (Champagne can only come from Champagne, France and Tequila can only come from Jalisco, Mexico). See dairy examples here: National Milk Producers Federation 2015 Press Release and a 2011 report to the Board of Directors of the International Dairy Food Association (IDFA).
The six reasons to repeal farm subsidies according to the CATO articles are as follows:
In a related article, the same author highlight five ways through which the federal government intervenes in dairy markets.