The 2014 Farm Bill-An Economic Welfare Disaster or Triumph?
Barry K. Goodwin and Vincent H. Smith
The 2014 Farm Bill introduced a plethora of programs - including potentially expensive shallow loss programs - that transfer income to farmers and landowners. It modified conservation and food aid programs, extended heavily subsidized agricultural insurance programs, and modestly changed agricultural research programs. This theme evaluates the economic welfare effects of these new farm bill initiatives.
Deadweight losses of new U.S. farm programs will be minimal because payments are decoupled from planted acreage. This feature is consistent with Becker's theory that policy results from competition between rent-seekers. The actual economic damage from the newly designed farm subsidies is the opportunity cost of not funding programs that increase social welfare.
The conservation titles of the farm bill have done a great deal of good, but the weight of the evidence indicates that taxpayers could get more environmental protection for the money. That will likely be the case as long as environmental problems in agriculture are addressed via the conservation titles of the farm bill.
Erin C. Lentz and Christopher B. Barrett
There is ample evidence about how to make international food assistance more responsive to recipient needs, faster, cheaper, and healthier. The 2014 Farm Bill moves U.S. international food aid and food assistance policies in the right direction, but ultimately it falls far short of what could be done.
Colin A. Carter
The 2014 Farm Bill expands farm subsidies and makes them more trade-distorting, weakening U.S. credibility as a promoter of freer international trade. The economic costs of U.S. farm policy go well beyond domestic welfare costs when we account for the farm bill’s negative impact on international trade negotiations that would benefit the entire economy.
Brian Davern Wright
Decades of research have confirmed that crop insurance is an inherently costly program. A dollar of expected benefits to farmers costs taxpayers close to $1.50. Successive farm bills have consistently failed to fulfill their stated crop insurance goals but policy makers, instead of holding the crop insurance program accountable, have expanded it to be the centerpiece of the latest Farm Bill.
Philip G. Pardey, Jason M. Beddow, and Steven T. Buccola
Following over a decade of declines, the 2014 Agricultural Act yielded modest increases in research and development (R&D) funding. The increase is insufficient to reverse the decline in the U.S. share of global public food and agricultural R&D, and failing to replenish the R&D stock may have profound adverse consequences for the competiveness of U.S. agriculture.