November 14, 2007
This is rich. The US Congress is writing a fresh agricultural support bill. Brave Democrat Congresswoman Amy Klobuchar wants to restrict farm subsidies to farmers with incomes below $750,000. Even with the dollar in free fall that’s hardly poverty stricken. Our compassionate Nanny in Chief the Bush man wants to cap government largesse to farmers with incomes up to $200,000. Only 2.67% of American households have annual incomes over $200,000.
From justice, optimal production and consumer welfare perspectives the right, if politically problematic for our invertebrate Congress, farm subsidy number is zero. Farm subsidies and price supports transfer wealth from poorer Americans to affluent farmers, keep food prices artificially high, and curb overseas competition. The effect on poor countries’ farmers with comparative advantage is shameful and galling. US agricultural policy hinders their ability to export to the world’s largest market. Then to salve our guilt we give foreign aid to those our policy helps keep impoverished, aid that does little if anything to boost economic development.
While the EU’s Common Agricultural Policy arguably is worse, on eliminating pernicious farm subsidies and protection the US should lead by example. The elimination of farm subsidies and price supports would benefit American consumers regardless of what our Euro-cousins do.
Wall Street Journal: The No Farmer Left Behind ActAuthor : Eric Grover