March 9, 2015

March 9, 2015 | Commentary on Agriculture, Regulation

Ag policy needs less government intervention

Agricultural policy doesn’t get the attention that it deserves. But policymakers and potential presidential candidates have the chance to change that at the Iowa Ag Summit in Des Moines.

One reason agriculture gets overlooked is that the farm bill is really a food stamp bill. About 80 percent of the spending is for food stamps. Legislators push through this legislation through, and proper discussion doesn’t exist for either agricultural programs or food stamps.

Food stamps need to be separated from the agricultural programs. Each should be considered on its own merits. Keeping these programs together to get legislation passed is a tacit admission that neither can pass individually.

The policymakers at the summit need to think beyond the status quo when it comes to agricultural policy. The status quo consists of excessive government intervention in agriculture, from subsidies to regulation. Farmers and ranchers don’t need Washington to provide handouts, and they certainly don’t need bureaucrats to overregulate them and undermine their property rights.

Some subsidies have been justified as providing a safety net. But even this concept has been turned on its head. Legislators created a new commodity program that covers even minor losses — losses often associated with normal business risk. Another new commodity program pays farmers when commodity prices fall below a fixed price set in the law. This program, which was sold as covering deep losses only, actually set the fixed prices so high that payments were effectively guaranteed for many farmers.

Government intervention isn’t just about subsidies. It’s also about regulation and other obstacles that hinder agriculture.

A prime example: the Army Corps of Engineers and the Environmental Protection Agency’s proposed rule defining what waters these agencies can regulate under the Clean Water Act. The proposed rule is so broad that almost any type of water will likely be covered. That means farmers and ranchers will have to secure far more permits to engage in agricultural activities. If this rule is finalized, almost all ditches would be regulated as would tributaries that have ephemeral flow, including depressions in land that are dry most of the year except when there’s heavy rain.

As policymakers and the potential presidential candidates develop their thinking on agricultural policy, they should remember that the same free-market principles that have allowed this nation to flourish should apply equally to agriculture. They should aggressively want to challenge trade barriers that block American commodities from entering foreign markets while recognizing that we must meet our own trade obligations.

Agriculture has been subject to the same central planning philosophy that has existed for more than 80 years. This needs to change. It will take leaders willing to get the federal government out of the way so that farmers and ranchers can better use their expertise to provide food that feeds this nation — and the world.

 - Daren Bakst is a research fellow ‎in agricultural studies at The Heritage Foundation.

About the Author

Daren Bakst Research Fellow in Agricultural Policy
Thomas A. Roe Institute for Economic Policy Studies

Originally appeared in The Des Moines Register