The political impossibility of ending farm subsidies - despite the impeccable logic - has caused more payment opponents to consider a buyout.
Unfortunately the very political power that keeps farmers on the government payroll means that an outright and overnight end to farm programs is unlikely without "financial inducement." An up-front buyout of existing trade barriers and farm subsidies, based on (but less than) the present discounted value of seven years of expected payments—5 years representing the approximate tenure of a farm bill, plus two bonus years—might do the trick. Based on current spending projections, that could cost somewhere in the vicinity of $75 billion.The psychological scheme here is we farmers will opt for money now and to heck with the future. While I can entertain that strategy as plausible, it only seems likely if producers are convinced the subsidies are going to end anyway. There is the tough idea to swallow.
Repealing the permanent farm legislation is required for this option to be credible.
[I'll try to post more on this plan from The Cato Institute after it is released Wednesday.]
1 comment:
The permanent legislation used to be a factor, but some, perhaps all, was repealed. Perhaps in 2002, maybe 1996, the farm bills merge together when you reach a certain age. Logically it would have been in 1996, when Freedom to Farm was supposed to be the buyout.
My skepticism about the buyouts is high. I remember when the 1980 crop insurance legislation was supposed to end disaster programs for good. About the only way to eliminate farm programs is to take the vote away from farmers and to eliminate free markets and weather.
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