Monday, July 3, 2006
More than $9 billion a year in federal money is paid to landowners for NOT growing crops, according to an extraordinary report yesterday in the Washington Post. I had thought, ignorantly, that payments for not growing cops had been phased out in the 1990s. The laws were indeed changed, but a new program that was expected to be a temporary transition to a free market has now become permanent. The most outrageous aspect of the system is not simply the idea of paying people not to engage in useful activity; after all, if one accepts the idea of government's meddling to raise farm prices, any economic mechanism would have its problems. The worst aspect, in my view, are the loose details for receiving the payments. According to the Post, there is no requirement that the landowner be a farmer or that any of the land be used to grow crops; payments are made to any owner of land that was historically used for crops. This incentive both discourages farming and encourages purchases of subsidized land as investments by wealthy (and now subsidized) investors who have no ties at all to farming.