Jayson Lusk | May 9, 2014
Guiding principles for free-market agriculture policy
By Jayson Lusk
Earlier this year, the U.S. Congress passed a farm bill projected to cost almost a trillion dollars over the next 10 years. Most of the spending goes toward food and nutrition programs (like food stamps), but more than 15 percent of the total, or $14.6 billion per year, is allocated for farm commodity and crop insurance programs that subsidize farmers’ premiums, deductibles, or both.
Despite the support of many Republicans and tea-party sympathizers, many aspects of the farm bill are inconsistent with free-market principles. In response, The Heritage Foundation has recently released a brief entitled “10 Guiding Principles for Agriculture Policy: A Free-Market Vision.” A few snippets:
Markets, Not Government Incentives and Controls, Should Inform Farming Decisions. Farmers make decisions based on the restrictions imposed upon them through central-planning policies and the subsidies that distort their choices through misguided incentives. These policies include loans, disaster assistance, price and revenue guarantees, supply restrictions, import barriers, payments to idle land, marketing orders (which are effectively government-sanctioned cartels), and subsidized crop insurance. There is an assumption in agriculture that the federal government can use central planning to best allocate resources. Nobody has the knowledge to plan economies. By responding to markets, farmers would be free to produce what they deem fit to meet consumer demand.
Property Rights Are the Cornerstone of American Agriculture. Farmers and ranchers are the best stewards of their property. Property ownership creates powerful incentives to maintain property. Many farmers and ranchers depend on their land for their very livelihood: According to the U.S. Department of Agriculture, “farm real estate (land and structures) accounted for 82 percent of the total value of U.S. farm assets in 2012.” Too often, farmers and ranchers have to bear an excessive cost for government regulations that place restrictions on how they use their property. This problem is particularly egregious with laws such as the Endangered Species Act. Farmers and ranchers bear costs that should be borne by society generally, not a narrow group of property owners alone. In many instances, the restrictions are so great as to amount to regulatory takings, which should trigger just compensation to the harmed property owners. Clearly defined and strongly enforced property rights might also help develop solutions to addressing many agriculture challenges. For example, water rights can be used by the property owner to participate in water markets, likely serving as the best means to allocate scarce water resources.
Individual Dietary Decisions Should Be Respected. From mandatory menu labeling requirements to the Food and Drug Administration’s proposed de facto ban on trans fat in processed food, the federal government presumes that the public is incapable of making informed dietary choices. These policies also assume that the government knows what the “right” dietary decisions are for individuals, including what is best for them nutritionally. Dietary decisions are complex and based on numerous factors that may include nutritional value but are just as likely based on individual preferences such as taste. These are personal choices that should be made by individuals themselves, not by government officials who believe they should try to manipulate or limit what Americans can eat.
I encourage you to read the whole thing here.
Samuel Roberts Noble Distinguished Fellow
Agricultural economist Jayson Lusk is the Samuel Roberts Noble Distinguished Fellow at OCPA. The author of The Food Police: A Well-Fed Manifesto about the Politics of Your Plate (Crown Forum, 2013), Dr. Lusk is Regents Professor and Willard Sparks Endowed Chair at Oklahoma State University.