Downsizing Blog
Ethiopia is experiencing a humanitarian crisis as a result of civil war and drought. Foreign food aid seems justified, but food aid to Ethiopia has been severely mismanaged.
As Congress considers a farm bill in coming months, it should keep in mind that farm household incomes have risen greatly over the decades.
The U.S. Department of Agriculture (USDA) spends more than $2 billion a year on three programs that provide food aid to poor countries, which aim to alleviate hunger and support development. The programs have noble goals, but they suffer from serious practical flaws.
Congress is scheduled to consider a farm bill this fall to reauthorize farm programs and the Supplemental Nutrition Assistance Program (SNAP). Extending current programs would cost $1.5 trillion over 10 years, but there will be efforts to boost benefit levels and add new programs.
With the congressional debate over a new farm bill on the horizon, the Environmental Working Group (EWG) held a conference today to examine farm policies. The speakers included both environmentalists and fiscal conservatives who share views that some farm programs are anti‐green and benefit wealthy landowners who do not need the money. The EWG has been a leader in calling for farm subsidy reform.
With Congress scheduled to reauthorize farm subsidies this fall, lawmakers should consider reform lessons from New Zealand. Facing high budget deficits in the 1980s, New Zealand cut government spending, including eliminating nearly all farm subsidies. That was an impressive reform because the country is highly dependent on agriculture. Since then, New Zealand has remained a model of market‐based farming.
With Congress scheduled to reauthorize farm subsidies this fall, lawmakers should consider reform lessons from New Zealand. Facing high budget deficits in the 1980s, New Zealand cut government spending, including eliminating nearly all farm subsidies. That was an impressive reform because the country is highly dependent on agriculture. Since then, New Zealand has remained a model of market‐based farming.
Congress is scheduled to consider a major farm bill this year, which will reauthorize many U.S. Department of Agriculture (USDA) programs, including farm subsidies and food stamps. The legislation could cost $150 billion a year and so presents an opportunity to find budget savings and reduce the flood of red ink in Washington.
The bipartisan debt‐ceiling deal passed in June reflected a new congressional focus on spending restraint. Congress should extend the restraint when it considers a major farm bill this fall. Cutting farm subsidies is a good way to tackle wasteful spending and reduce budget deficits.
Which farm programs should Congress cut?
Farm subsidy programs run by the U.S. Department of Agriculture displaces private methods of managing risk and gives subsidies to farm businesses that do not need them.
Congress’s Farm Bill bundles a bunch of loser provisions together, making it a legislative winner.
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