The Senate is expected to begin debate this week on a five-year farm and food aid bill that would save $9.3 billion by ending direct payments to farmers and replacing them with subsidized insurance programs for when the weather turns bad or prices go south.
The details are still to be worked out. But there's rare agreement that fixed annual subsidies of $5 billion a year for farmers are no longer feasible in this age of tight budgets and when farmers in general are enjoying record prosperity.
This isn't what I'd call great news, but, hey, it's a start. Farm subsidies have always set up a little cognitive dissonance for some Hoosiers, who like smaller government, bless their hearts, but can't get over the fact that Indiana consistently ranks in the top 10 for subsidies. Because we usually get so little in return for our federal contributions, relative to other states, this is a big deal. Hoosier ambivalence about subsidies are reflected in the work of outgoing Sen. Richard Lugar, who has been on the Agriculture Committee long enough to be a part of the mess but who has also been a leading advocate for eliminating subsidies.
While the economic malfeasance of agricultural subsidies may be relatively low on the totem pole of the federal government’s massively wasteful and intrusive spending binge (we’ve definitely got some bigger fish to fry), they are in and of themselves astoundingly terrible ideas that come with a whole host of neighborhood effects. From toying with market signals and inflating food prices; to inhibiting free trade that would benefit the poverty-stricken worldwide; to encouraging overproduction that degrades the environment: they’re just bad news. No American industry has been so persistently coddled as agriculture, helping out niche groups and special interests in the short term but making us all worse off in the long term.