Thread by @eatcookwrite

THREAD: 3 TOP ZOMBIE TROPES ABOUT FARM SUBSIDIES:A friendly guide for non-ag journos-please forward / tag relevant writers and editors

A guide to avoid saying dumb things "everyone knows" which aren't actually true at all. (disclaimer: not a defense of US ag policy) #fafdlstorm

ZOMBIE AG SUBSIDY TROPE #1:
"Farm subsidies fuel cheap food which contributes to the obesity crisis."

INCORRECT !!!!!
1

This popped up recently, not once, but TWICE on the @nytimes OP/ED page last month alone. It's a really, really popular bit of zombie conventional wisdom.
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@4fishgreenberg asks "Why aren’t Americans being more daring with their grain choices? Subsidies."
nytimes.com/2018/07/19/opi…
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But oats (which he'd been extolling a few sentences earlier), wheat, barley, and rice (flax, peanuts, chickpeas, dried beans and lentils too) are all eligible for the same subsidies.
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It's worth taking a pause to point out another constant misconception about the ag economy. I never can understand why people think agriculture is the one area in the economy where supply primarily drives demand rather than supply rising to meet demand.
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6
nytimes.com/2018/08/09/opi…
Then nutrition researcher @davidludwigmd (I'm a fan BTW) and economist @krogoff wrote:

But farm policy DOESN'T make commodity crops cheap. Commodity crops are commodity crops because they are cheap and they are subsidized because they are staples. But it’s biology, physics, and mechanization that make them cheap.
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The economic research finds little to no effect of commodity programs on price - and those effects are microscopic in the price of Cheetos anyways. The price those programs affect is the price of crop land.
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Sugar tariffs and quotas RAISE the price of sugar. The RFS ethanol mandate RAISES the price of corn. Conservation programs that take land out of production RAISE crop prices by restricting supply.
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For more on this:
@JaysonLusk bit.ly/agpolicy-obesi…
@TamarHaspel bit.ly/TH-cheapjunkfo…
Me bit.ly/michaelpollani…
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The research literature can be found here:
fafdl.org/wiki/index.php…

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ZOMBIE AG SUBSIDY TROPE #2:
"Farm subsidies mostly benefit large farms and drive farm consolidation."

INCORRECT !!!!!
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There is a kernel* of truth here. If by benefit you mean "Who gets the most money from that pot?". Yes. Bigger farms get the most money.

*pun!!!
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But when you ask "Who gets the most benefit from each dollar they receive in subsidies?" The answer is marginally profitable small and medium-sized farms.
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For bigger farms, the crop insurance subsidies are just free money that they don't really need, a dead weight loss for taxpayers. For farms on the margins of profitability, they can be the difference between surviving another year or not.
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Ask the question for any program, "If this program went away, would consolidation increase or decrease?" The answer for just about any one of them is: Getting rid of the program would INCREASE the rate of consolidation.
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Crop insurance SLOWS consolidation. Conservation programs SLOW consolidation. Public research SLOWS consolidation. Extension SLOWS consolidation.
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Even the most corrupt program of bank loans for poultry houses that is crony capitalism for Perdue and Tyson makes small poultry farm possible. Take away that loan program and production is likely brought in-house by the giants.
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A valid criticism would be that policy could be doing MORE to support small farms and slow down consolidation. *
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That's different from comparing our current regime to some other regime that we could imagine or propose that would be more supportive of smaller farms and lower rates of consolidation.
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* That's not a criticism I would agree with. I think farms in the US are too small and if we are subsidizing ag, other than public goods (conservation, research, extension) it should be transitioning unprofitable farmers out of the market with a softer landing.
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The poultry tournament system is case in point. Take away that corrupt loan backstopping program, and running poultry houses goes inside the companies and creates solid middle management jobs with benefits.
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That's different from comparing our current regime to some other regime that we could imagine or propose that would be more supportive of smaller farms and lower rates of consolidation.
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ZOMBIE AG SUBSIDY TROPE #3:
"Farm subsidies mostly go to Big Ag … Cargill, ADM, and Monsanto.”

INCORRECT !!!!!
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We’ve all heard this one. I just heard saw someone on MSNBC toss it out there in trying to comment on Trump’s tariff offset hand outs. It even more than the others outs you as someone talking out your ass.
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It barely makes any sense, other than these companies buy and sell from farmers that receive subsidies, so somehow the subsidies end up in their pockets.
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But this is more of a bankshot than saying that SNAP is a subsidy to grocery chains. There is a set of companies that do end up pocketing the money, but that the insurance companies that sell subsidized crop insurance that they ordinarily wouldn’t sell.
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I understand. US farm policy isn’t an area where non-ag political commentators typically weigh in. And US farm policy is dense and opaque (I think, intentionally so) …
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I know politically engaged dairy farmers who can’t explain ARC/PLC and politically engaged corn & soy farmers who wouldn’t be able to sketch out America’s Rube Goldberg system of dairy supply management.

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But these three blunders should be avoidable w/ a minimum amount of boning up.
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~fin~