评论：混乱的美国农业政策
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Opinion: U.S. farm policy in disarray
By Vincent H. Smith on Sep 23, 2015 at 2:00 p.m.
In 1970, professor D. Gale Johnson published what became a seminal work on agricultural policy. Johnson settled on the title World Agriculture in Disarray, to reflect the chaotic incentives and economic inefficiencies created by the agricultural policies of countries including Australia, Canada, Japan, New Zealand, the U.S. and the European Union.
Some of those countries since have abandoned extensive supply control, price support, farm income payments and other forms of intervention. Not surprisingly, in those countries, farmers generally have become more entrepreneurial and economically efficient, and agricultural productivity has improved at a faster rate than in other countries whose programs have sustained inefficient farms and reduced incentives for innovation.
In this context, Australia and New Zealand, where most farm subsidy programs were terminated in the 1980s, are prime examples of the benefits for agricultural productivity of ending farm programs. Other countries have made changes or moved toward terminating subsidy programs, but only at a slow pace. The European Union falls into the former and Japan into the latter category. In Canadian provinces that continue to “control” the supply of dairy products and eggs, many dairy and poultry farms tend to be inefficient, and prices for milk and other dairy products are unnecessarily high.
While the U.S. appeared to be moving away from subsidies that distorted agricultural markets in the early and mid-1990s, the House and Senate agricultural committees since have been allowed to make a 180-degree turn. In many ways, the 2014 farm bill has made matters worse.
One example is federal crop insurance, which is to be continued and expanded. In the 1980s, government spending on the program was less than $1 billion per year, but now, the program directs an annual average of about $8.5 billion in subsidies to farmers and crop insurance companies.
Federal crop insurance unequivocally distorts production incentives, encourages the expansion of crop production on environmentally sensitive lands and discourages innovation and adoption of private-sector risk-management technologies and strategies. At the same time, the program mainly benefits the wealthiest 15 percent of farm operations, who receive more than 80 percent of subsidies paid under the program.
The dairy margin protection income support program for dairy farmers is another example. It guarantees that most milk producers almost certainly will receive revenues in excess of their costs. Any dairy farm can sign up for access to subsidies. But the program’s structure is so poor that milk producers can make pretty good guesses about whether the program will provide them with large payouts in any year and then, by paying heavily subsidized premiums, sign up for higher coverage levels.
By guaranteeing profits for many inefficient operations using outmoded technologies, the program is likely to do nothing good for the U.S. dairy processing industry’s long-run competitiveness in global dairy product markets. And it could well cost taxpayers as much as $4 billion to $5 billion in some years.
Then there is the Stacked Income Protection program for cotton known as STAX. The STAX program enables cotton producers to purchase a kind of insurance for every acre of cotton they plant that, in effect, protects them against both price decreases and yield losses in their counties.
Production and market distortions associated with STAX are substantial. Taxpayers are on the hook for administra-
tion costs and 80 percent of the payments cotton farmers receive for “losses.”
Further, in North Texas, and some other parts of the country, cotton is raised on fragile lands. So, in addition to directing most of the STAX subsidies to the largest and wealthiest cotton operations, the program encourages cotton farmers to expand production in areas where the environmental damage they could cause is relatively severe.
While Johnson would and, before he died in 2003, did applaud the agricultural policy reforms implemented in Australia and New Zealand in the 1980s, and in the European Union in the 1990s, he would almost surely see no reason to view the 2014 farm bill as anything but a policy disaster. Ag programs in the U.S. continue to be a contributor to the policy disarray about which Johnson wrote in 1970.
Editor’s note: Smith is a professor of economics at Montana State University in Bozeman. He wrote this opinion piece for InsideSources.com.
http://www.agweek.com/news/nation-and-world/3843646-opinion-us-farm-policy-disarray