Growing up on a farm, I learned to fix almost anything with some bailing wire, a hammer, and some duct tape.  Sometimes the fix was intentionally temporary–while we waited for the right part; sometimes we hoped it would last b/c it would be too expensive to “do it right.” Well, you know what they say, “hope in one hand….” Permanent solutions invariable required the right tools and the right parts.

The Internet is an excellent tool for one of the primary  missions of land-grant schools: outreach and extension. Farmdoc is a prime example of the innovative, forward-thinking that goes on around me here at the University of Illinois. It’s extension and outreach for the 21st century, delivered by the Internet. The farmdoc folks recently started blogging, and I had the opportunity to cross-post my “Progressive” subsidies post there yesterday. There have been a few interesting comments.

The comments  consistently observe that subsidy progressivity doesn’t capture all facets of the agricultural-subsidy issue. Unlike the income tax, which is ubiquitous (just like death), only a small slice of the population receives farm subsidies. Measuring the progressivity of subsidies might not be useful when comparing subsidy recipients with non-recipients.

Fair comment. So is measuring subsidy progressivity ever useful? Yes. It is a useful tool when looking at the distribution of agricultural subsidies among farms that receive them. Too often the policy debate is clouded by the argument that, “subsidies go to ‘big program-crop producers’ but not to the little guy with an acre of vegetables.” This rhetorical fallacy conveniently overlooks the “little program-crop producers.” If we should care about small family farms, then we should care about all of them. My point is, among farms receiving subsidies, the distribution of subsidies is “fair.” Progressivity is the right tool for the question.

Forty-three percent of all farms receive subsidies. Subsidy progressivity is the best way to talk about fairness among these farms. The following table provides a lot of information about the distribution of subsidies. One thing I want to highlight in this context is that a majority, 54-83%, of farms with more than $10,000 in sales receive subsidies, and between 53-79% of farms with positive net returns receive subsidies.

The distribution of agricultural subsidies by sales, type, and net income. Source: 2005 Agricultural and Resource Management Survey

A productive policy debate cannot rely on fallacious reasoning. We care about small farms vis-a-vis large farms, and we care about program-crop producers vis-a-vis non-program-crop producers. Progress depends on using the right tool to analyze each of these distinct issues. Trying to fix it with a hammer and some duct tape won’t cut it.

Advertisements