January 23, 2014

Watering the Seeds of Farm Programs and Farm Income Growth

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US farm policy is a grab bag of subsidies, in-kind transfers, protectionist trade barriers, and price and revenue supports for agribusiness. As this chart shows, these programs have multiplied over time, growing from 121 in 1980 to 249 in 2013. The growth in farm programs has coincided with a boom in farming income. Despite what you may have heard, the average farm household has earned more than the average US household for more than a decade and a half. Today, the average farm household earns 53 percent more than the average household.

In his latest Mercatus on Policy essay, economist Matthew Mitchell makes the case that current US farm policy is neither equitable nor efficient. Both conservatives who value free markets and liberals who value social justice should be clamoring for reform.