Making Sense of Agricultural Policy

1. Making Sense of Agricultural Policy Comstock Chapter 1

2. Too Much of a Good Thing • Agriculture Crisis: a result of surpluses, tragedy of plenty “One way or another, most of the confusion in American agriculture policy today arises from our reluctance to accept the idea that growing food is sometimes a bad the wrong thing to do.”

3. Rejection of Overproduction • Farming occupies an honored place in our society because: • Instinctual desire to have a secure food source • Economic input • Constitutes 20% of GDP, farm to retail • Farmers find it difficult to face the over production issue because of the nature of rural life • But as the cost of federal subsides rises and the need for budgets to be cut, too rises the criticism of these subsidies and programs

4. Misconceptions • Farm Families, as a group, are poor • Farmers are being driven from the land • Farming is a disastrous investment • Expansion in farm exodus • It was worse in previous decades

5. Misconceptions • Agri-business dominates farming • Most farms don’t get subsidies • No one can get rich on federal subsidies • Most farmers don’t have burdensome debt • Debt doesn’t hits farmers as hard • Embargos don’t hurt farmers

6. Policy Implications • Government Programs are inconsistent • Free market risk is maintained • Federal bailouts • Capitalism entrepreneurship and central planning • Federal Farm payments • Deficiency payments • Loans (CCC) • FMHA • Grain Storage • Conservation (soil and water) • Small Business Administration

7. Policy Implications • Food is cheap • Farm subsidies provide just enough money to keep nearly every farmer in America producing just enough surplus to hold down food prices