Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
July 25, 2014

Our Food Policy is Insane

With the farm bill shaping up to be one of the next major policy battles, Joseph Stiglitz argues that American food policy “has long been rife with head-scratching illogic … So it’s almost too absurd to believe that House Republicans are asking for a farm bill that would make all of these problems worse.”

According to Stiglitz, the current House proposal to cut food stamp benefits by $40 billion over 10 years (in addition to the already $5 billion in cuts from the expiration of the food stamp program) while allowing $14.9 billion in farm subsidies to continue, is economically and morally reprehensible.

Explains Stiglitz: “The proposal is a perfect example of how growing inequality has been fed by what economists call rent-seeking. As small numbers of Americans have grown extremely wealthy, their political power has also ballooned to a disproportionate size. Small, powerful interests — in this case, wealthy commercial farmers — help create market-skewing public policies that benefit only themselves, appropriating a larger slice of the nation’s economic pie. Their larger slice means everyone else gets a smaller one — the pie doesn’t get any bigger — though the rent-seekers are usually adept at taking little enough from individual Americans that they are hardly aware of the loss. While the money that they’ve picked from each individual American’s pocket is small, the aggregate is huge for the rent-seeker. And this in turn deepens inequality.”

  • gjdodger

    Fascinating. Here’s my take, as a 33 year veteran agricultural reporter. Farm subsidies are designed to maximize productivity. This means there is normally a surplus of feed and food grains, keeping prices low and encouraging production of processed foods and livestock. it also keeps US commodities priced low enough to compete on export markets; we have had a food trade net surplus every year for nearly 60 years. This produces foreign exchange and keeps those food companies profitable as well. It’s impossible to say what would happen if we got rid of farm subsidies, but my guess is the inevitable horizontal consolidation of production agriculture would occur a lot more rapidly and food prices would be at the mercy of a lot fewer people. Food stamps are great, not only because they feed the less fortunate but they are also the farmer’s best friend, further driving up demand for farm products. You can’t say cutting food stamps while raising farm subsidies makes us crazy. They have two different purposes.

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