What direction should U.S. farm spending take?

Monday, February 28, 2011

According to a study by Oklahoma State University, most professional economists favour eliminating agricultural subsidies. Farm groups, however, like the status quo and environmental groups have their own view. President Obama wants to cut direct payments to "corporate megafarms" with more than $500,000 in annual sales. But nobody really asks taxpayers how they would prioritize spending at the U.S. Department of Agriculture (USDA).

Farm support programs account for about 20 per cent of USDA expenditures, with 60.4 per cent of dollars going to food assistance in 2008. A previous study found that more than 80 per cent of taxpayers favour subsidizing farmers as a concept. But prioritizing spending results in a different answer. Over half of 1,000 consumers (and taxpayers) polled thought food safety and inspection expenditures, currently 3.14 per cent of the USDA budget, were most important. The study points out that poll respondents weren't informed about the roles of the Food and Drug Administration or the Environmental Protection Agency.

"It remains to be seen whether people would be as supportive of USDA expenditures on food safety and inspection, were they also aware of other federal programs," says a study footnote.

Respondents to the poll said food assistance costs twice as much as it should. Natural resources and the environment, research and education should get more money. Rural development received the lowest support of six categories.

Expenditures are sure to come under a spotlight as the U.S. government figures out how to rein in a multi-trillion dollar budget deficit. BF