in Agriculture, Economics, Uncategorized

Haspel’s Washington Post article: Why do taxpayers subsidize rich farmers?

Image from http://www.cgpgrey.com [CC BY 2.0], via Wikimedia Commons

Tamar Haspel has an article in yesterday’s Washington Post titled, “Why do taxpayers subsidize rich farmers?”

The article is a take on the USDA’s recent report “The Evolving Distribution of Payments From Commodity, Conservation, and Federal Crop Insurance Programs”“, by McFadden and Hoppe that looks at subsidies on crop insurance premiums by farmer income, rather than farms by number of acres.

Haspel highlights one of the report’s findings:

Subsidy reduction is an outlier of an idea in Washington because it has what almost nothing does these days — support from the right and left. On the right, groups like the Heritage Foundation and the Cato Institute are finding common ground with left-leaning groups like the Environmental Working Group. Even the Congressional Budget Office, which generally avoids policy prescriptions, has issued a report on how to reduce the costs of crop insurance.

Read that report, and you get a sense of how complicated subsidies are. But step back from the complexities, and I think there’s a very simple idea at play here: Most Americans balk at giving hard-earned taxpayer dollars to people who make many times what most Americans do.

The main idea being, how can we justify giving the largest subsidies to the ‘richest’ farmers?

This sentiment masks two key elements that explain how we got to this point, and why we (meaning the U.S. as a society) might prefer this policy to others we have tried before.
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