Debating the raft of rural subsidies

It all started when Washington Post columnist Ezra Klein closed a column about the economics of cities with an offhand comment suggesting an end to the "raft of subsidies we devote to sustaining rural living."

This column led to a fascinating debate between Klein and Agriculture Secretary Tom Vilsack, who said he took Klein's column "as a slam on rural America."  In this debate, both participants made some rhetorical errors.  Vilsack focused too much on the moral superiority of rural Americans and probably should have engaged Klein's specific concerns about subsidies more frankly.  Klein conflated agricultural subsidies with broader rural subsidies, giving too little attention to the fact that most rural residents work in industries other than agriculture and get no benefit from agricultural subsidies.

Brian Depew of the Center for Rural Affairs, a non-profit farm advocacy organization based in eastern Nebraska, helps clear up the whole mess in a column at Civil Eats:

If by “rural subsidies” Klein means farm commodity subsidies, that should be isolated and taken head on. Klein is right to question and challenge the current structure of farm commodity subsidies. Current farm programs provide unlimited benefit to the largest farm operators.

It cannot be said, however, that these subsidies are devoted to sustaining rural life. In fact, the system is literally undermining the economic and social foundation of rural communities.

The subsidies accrue to only a small portion of the rural population. A 2007 report from the Center for Rural Affairs, Over Subsidizing and Under Investing, shows how badly skewed USDA investment is toward very large farm operators and away from investing in programs that build a future for all of rural America.

The report found that the USDA spent nearly twice as much to subsidize just the 20 largest farms in each of 13 leading farm states examined as it invested in rural-development programs to create economic opportunity for the three million people living in 1,400 towns in the 20 most-struggling rural counties in the same 13 states.

Current policy encourages big farms to get even bigger. Fewer farmers means fewer people in rural America. As farms consolidate, the population in the countryside declines. As the farm population declines, small towns also decline as less farmers need supplies and services. Rather than sustaining rural life, the current farm commodity system subsidies the decline of rural life.

All other USDA rural development programs combined (rural broadband, rural small business, value added market development, etc.) account for a mere a fraction of one percent of all USDA spending.

Eastern Nebraska, August 2010 (photo: Wilde)