In a new report for the American Enterprise Institute (AEI), Dan Sumner, Joe Glauber, and I consider all the different ways that farm programs could affect prices or incomes, which in turn could affect poverty and nutrition for low-income Americans. We conclude:
Despite occasional claims to the contrary, farm subsidy programs have little impact on food consumption, food security, or nutrition in the United States.It might surprise you to hear that this is a widely held view among researchers and policy analysts in agricultural economics. Interestingly, it depends little on a person's political ideology.
Strongly market-oriented economists tend to describe farm subsidy programs as an ineffective use of tax dollars. Ryan Nabil and Vincent Smith write this week in Inside Sources:
There is no poverty and nutrition alleviation rationale for U.S. farm subsidies because they do not have any meaningful effects on poverty. These programs simply transfer government monies mostly to well-off folks who can afford competent lobbyists but are in no need of government handouts.
At the same time, the Environmental Working Group writes this week:
Last fall, an EWG investigation debunked the agriculture industry’s claims that American farms “feed the world.” In fact, fewer than 1 percent of U.S. exports go toward feeding the hungriest nations.
Now, a study by three leading experts shows that federal farm subsidy programs such as crop insurance don’t help feed hungry Americans either.
An analysis by Joseph Glauber, Daniel Sumner and Parke Wilde for the American Enterprise Institute confirms that farm subsidies don’t improve food security for poor Americans – even for those who live in farm country.
Before reaching our conclusions, Joe, Dan, and I tried to contemplate a wide array of ways that somebody could say farm programs help the nutrition status of the poor in the United States. For example, perhaps the programs lower prices of beneficial foods (but they don't), or perhaps they help the income of poor farmers (but they go mostly to more prosperous farmers), or perhaps they help farm workers by increasing labor demand in certain industries (but the least labor-intensive industries get more subsidies).
In a spirit of open communication across diverse traditions, especially this particular week, I look forward to participating in the AEI event this Monday, Jan 23, connected with the release of this report.