Tag: Agricultural Policy

This week on Banter, AEI Visiting Scholar and Director of Agriculture Studies Vincent Smith joined the show to discuss the history of US agriculture policy and provisions of the 2018 Farm Bill, including farm subsidies and SNAP work requirement measures. Dr. Smith is a Professor of Economics in the Department of Agricultural Economics at Montana State University and co-director of MSU’s Agricultural Marketing Policy Center. He hosted a public event at AEI on the 2018 Farm Bill including what it means for the future of farm subsidies and US agriculture productivity. You can watch the full event video at the link below.

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In this AEI Events Podcast, agriculture experts Vince Smith and Philip Pardey discuss their new report on the benefit from research and development (R&D) funding in the US Farm Bill. Farm bill dollars dedicated to food and agricultural R&D expand the overall size of the agricultural pie to benefit not only innovative farmers and agribusinesses but also taxpaying consumers who foot the bill. The authors explain how productivity growth induced by publicly funded R&D investments lowers costs of production and the price of food. They concluded by arguing that the economically sensible strategy is to cut back on wasteful farm bill spending and instead significantly increase funding for public investments in agricultural R&D.

The share of US Department of Agriculture (USDA) spending directed to food and agricultural research and development (R&D) has fallen dramatically to less than 3 percent of the agency’s total budget in fiscal year 2017. As a consequence of these shifts in USDA spending priorities, the US has lost significant global R&D ground with large agricultural economies.

Contributor Post Created with Sketch. The Supreme Court’s Incomplete Raisin Decision

 

shutterstock_155693495Many opponents of the government’s persistent meddling in agricultural markets hailed the recent Supreme Court decision in Horne v. Department of Agriculture — which found that a government scheme in which raisins are confiscated from growers in order to prop up crop prices constituted a taking that required just compensation — as a victory for limited government. As I note in my new column for Defining Ideas, however, the Court’s approach to this topic was woefully incomplete:

The most amazing part of this saga is not that the Hornes won, but that no one involved in the litigation used the word “cartel.” The Hornes had to avoid the term, which would undermine their claim. A cartel arrangement is not just a naked taking. Its offset turns out to be the higher prices that the Hornes and other cartel members can fetch for their remaining stock of raisins in the open market, which should count as a form of in-kind compensation under the Takings Clause. Under traditional antitrust lingo, they are cheaters who work under the cartel umbrella. All power to them!

Nonetheless, the government did not wish to make an open admission that the Marketing Act fortifies cartels, lest they undermine the stabilization myth that helps shield these cartels from public disapproval. And the Supreme Court, which has already blessed these grotesque arrangements, could ill-afford to undermine the legitimacy of its own earlier rulings, including Wickard, which props up the modern welfare state, including Obamacare.