Make Subsidies Work

I was impressed with Sen. John McCain a couple of weeks ago when, in front of a crowd from the farm belt, he said he didn’t support farm subsidies. That got me thinking about the topic of subsidies in general. I find it hard to wrap my head around what the real intention is.

Since it was farm subsidies in particular that got me started, let’s stay with them. You would think that the first subsidies were meant to help the small independent farms protect themselves from large corporations, and even if that was the case then, it isn’t now. These days, subsidies artificially depress prices to make U.S. produce competitive with that from foreign nations. Which, in order to remain competitive, keeps those same nations from actually developing and growing in prosperity (I won’t take time to discuss all the ramifications, but think about those areas of the world with the most civil unrest).

Now, if the subsidies are keeping prices artificially low, they are not going towards improved farming methods or other innovations, which would go much farther in the long run.

Hmmm, and where does the money come from to pay for these subsidies? Why, our taxes, of course! (Sorry for the cynical tone.) But that means that we are paying for that same produce one way or another. It also means that the government, perhaps rightly so, that given the choice we would choose the less expensive produce. So they force the issue.

And the price is nothing to sneeze at. The current farm bill moving through Congress is priced at $307 billion. Which comes to about $1,000 per person. Makes that $300 economic stimulus check seem downright silly, doesn’t it?

I am all for subsidies that work to improve how we work. When they only support prices, however, we gain nothing.

Make subsidies do something.

For further reading, check out these sites:

• http://www.cato.org/pub_display.php?pub_id=5233
• http://en.wikipedia.org/wiki/Agricultural_subsidy
• http://www.washingtonpost.com/wp-dyn/content/article/2006/07/01/AR2006070100962.html
• http://www.commondreams.org/views02/0506-09.htm

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