A populist substitute for farm subsidies

Take away the subsidies to landowners and make per-capita payments, declining slowly, to everyone in the counties where the subsidies used to be paid. There must be something wrong with this, but I’m having a hard time figuring out what it is.

The list of evils attributable to agricultural subsidies is too long to be worth rehearsing. But the system has always seemed politically impregnable due to the concentration of benefits and the capacity of wealthy landowners to persuade their neighbors that what’s good for them is good for “agriculture” and that what’s good for agriculture is good for farming areas.

But as the number of actual subsidy recipients shrinks, it ought to be possible to work out a deal that’s self-evidently better for the neighbors while being less costly to the taxpayers, the environment, and the people trying to scratch a living from the soil of the developing world.

Here’s a first cut, subject to amendment and criticism:

Through whatever mechanism, reduce the amount of subsidy paid (e.g., by finally putting an enforceable upper limit on how much any individual, family, firm, or group of firms can collect). For each county where subsidies were paid, total up the reduction and divide that amount by teh population of the county.

Pay out 125% of that amount to each resident of the county in the first year, 120% in the second year, 115% in the third year, and so on. That means that the incomes of the rich landowners go down, and to some extent the incomes of, e.g., people who sell tractors go down, but the average income in the county goes up at first, along with the incomes of the vast majority of the residents. Compared to the current subsidy, the deadweight loss from writing checks to all the residents of counties where cotton used to be grown would be modest, and would decline over time as the payments shrink.

This is so obvious someone must already have thought of it and figured out why it wouldn’t work, either operationally or politically. But I haven’t seen it discussed.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com