Saturday, September 28, 2013

Does USDA Pay Farmers for Not Farming?

The Internet has made me more aware of the persistence of myths and inaccuracies, not to say "lies", in the world of public discourse.

To quote Mark Twain:


One of the persistent memes is the idea FSA (USDA) pays farmers for not farming, for not producing.  That came up in a recent Jonathan Chait piece here, in connection with a discussion that the right supported cutting food stamps but not cutting farm subsidies.   Chait linked to a Megan McArdle defense of the theory, though she would like to cut both food stamps and ag subsidies, based on "reciprocity".  The idea being that food stamps went to the idle poor, who did nothing for them, while subsidies went to farmers who at least were farming.   Chait used a GAO Report of last year 
which I missed, to counter McArdle's argument.

Seems to me there are several aspects to the meme:
  • it can refer to the "supply management/production adjustment" programs of past farm bills, in which case it's wrong.  Those programs are dead.
  • it can refer to the problem of payments issued to dead farmers.  That can be bad administration by FSA, though the casual discussion of it by people like Chait and EWG doesn't recognize some of the legitimate complexities. 
  • it can refer to the problem of direct payments issued based on acreage which is converted to non-farm uses, as cited in the GAO report.  That again is bad administration.
  • it can refer to the fact that the direct payment program is "decoupled", to comply with WTO rules--there's no requirement that farmers farm in order to earn the payments.  Again, the GAO report blasted the program for this, but it's what Congress passed.
  • it can refer to the Conservation Reserve Program (CRP), which has multi-year contracts for farmers to devote land, not to production of crops, but to conservation uses.  In my mind, the program's aim is to protect highly erodible land and provide conservation benefits, not to reduce production, but it's true that the program does reduce production.  (It's rather like saying the military draft in the 1960's gave men free health insurance--it did.) It's also true that some of the contracts can cover a whole farm, assuming all of the acreage is highly erodible.
So to me the bottom line is: USDA/FSA has no program which pays farmers for not producing.

[Updated to add the last sentence on the CRP paragraph.]

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