Tom Vilsack’s Unconvincing Case for Farm Subsidies

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One thing that everyone except the relevant politicians agrees on is the misguided nature of America’s agricultural subsidies. Either food products should be unsubsidized or else healthy foods should get special subsidies, but simply plowing money into subsidized corn production is a bad idea. But then there are the relevant politicians:

MARTIN: But of course you know the Agriculture Department has long been criticized by some activists for emphasizing the interests of farmers and growers over the interests of consumers, particularly by subsidizing certain foodstuffs which aren’t necessarily the most healthy and disadvantaging locally grown food, organic food and things of that sort.

So I just wanted to ask you about that. Do you think that that’s true, first of all, and do you plan to address that balance?

Sec. VILSACK: I really don’t think it’s true. I think that the reality in America is that we need both, because there’s a demand and need for both. I would say consumers do benefit from the way in which we structured our farm programs, at least as of today, because of the fact that our food is less expensive than it is any place else in the world. Folks in America have a great deal more discretion of what to do with their paycheck.

To say that Americans benefit from farm subsidies because they make food cheaper might make sense if not for the fact that Americans also have to pay for the subsidies. Besides which, we have a separate program—the Supplemental Nutrition Assistance Program (aka the artist formerly known as food stamps)—to subsidize food purchase among people in need.

More to the point, however, this is non-responsive to the point Martin was raising which was about what kinds of things are we subsidizing. Recall the relative shift in food prices over the past thirty years:

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If farm subsidies were making fresh fruit and vegetables cheaper, that would be a mild economic distortion designed to produce good public health. The improved public health outcomes might well compensate in purely GDP terms. And even if they didn’t, promoting longer healthier lives is a good idea. But fresh fruit and vegetables aren’t getting subsidized. Instead, via corn we’re subsidizing soda (high fructose corn syrup) and meat (corn-based feed) and nudging people toward unhealthy lifestyles.