And they don't cause obesity...

For many of you long-time readers, prepare to be dazzled by an atypical even-handedness on the topic of farm subsidies. First my post on subsidies and terrorism, and now this. While I never really bought into to DCP's-cause-fat-kids argument, neither did I defend our farm program from this charge.

The basic thrust of such assertions was that by subsidizing corn, HFCS was made cheaper and hence we all drank too much pop, and got fat. Over time, the anti-HFCS theory became a movement.

But as corn growers now loudly point out, the price of corn doesn't make food (much) more expensive, which in reverse means it can't really make food much cheaper either. Recently economists at UCD agreed, but with interesting collateral damage.

Compared with other factors, the policy-induced differences in relative prices among various farm commodities have played only a tiny role in determining excess food consumption and obesity in the United States. U.S. farm subsidies have many critics. A variety of arguments and evidence can be presented to show that the programs are ineffective, wasteful, or unfair. Eliminating farm subsidy programs could solve some of these problems, but would not even make a dent in America’s obesity problem.

Well, I think that sets the record straight. But as you might suspect, the researchers did find some tiny problems with our farm program (other than being "ineffective, wasteful, and unfair", of course).

The policy economics of the sweetener market raises some issues that merit some explicit discussion. Farm subsidies are responsible for the growth in the use of corn to produce high fructose corn syrup (HFCS) as a caloric sweetener, but not in the way it is often suggested. The culprit here is not corn subsidies; rather, it is sugar policy that has restricted imports, driven up the U.S. price of sugar, and encouraged the replacement of sugar with alternative caloric sweeteners.

Combining the sugar policy with the corn policy, the net effect of farm subsidies has been to increase the price of caloric sweeteners generally, and to discourage total consumption while causing a shift within the category between sugar and HFCS. In this context, eliminating the subsidy policies would result in cheaper caloric sweeteners, and if anything more rather than less total consumption of sweeteners, with a switch in the mix back toward sugar.

The bottom line is a solid academic reaffirmation of our farm policy as having little effect on food prices, just which food we choose. In effect, you could say we need even higher sugar prices to make HFCS more expensive, and junk food less available.

Wait...

Meanwhile what we do know is farm subsidies create discomfort among the recipients when the payments are revealed. The EWG introduced this transparency to the US years ago, and it has proven more effective than imagined at mobilizing formerly indifferent taxpayers (and especially media) into subsidy opposition.

Transparency is now easier than ever, whether by computer-crunched databases or cell-phone cameras. Our buddies in the EU are about to find out what happens when the payout list is an annual headache.

European Union governments will soon have to reveal to the outside world exactly how much they hand out in subsidies to their farmers from the EU's huge agricultural support policy, putting an end to years of secrecy.
By the end of April 2009, EU countries must publish an annual list of beneficiaries that get cash under the Common Agricultural Policy (CAP) and how much each one has received. At present, there are no rules to force EU governments to do this.
A vast support programme worth some 44 billion euros ($69.57 billion) a year, the CAP eats up close to half the entire EU annual budget.
The subsidy-heavy system is fiendishly complicated and has spawned dozens of studies that attempt to peer into its darkest corners.
EU countries will have to publish the full name, municipality and, if possible, postal code of all recipients on nationally-managed websites with a search tool to enable the public to see how much money each person or company received.
Cash amounts would be broken down in direct payments to farmers and other support measures, the European Commission said in a statement. The Commission, the EU executive, will also run its own website with internet links to each national site. "This is taxpayers' money, so it is very important that people know where it is being spent," EU Agriculture Commissioner Mariann Fischer Boel said. [More]

Your farm, like mine, may be miles from the nearest McDonalds, but trust me, it's on some radar somewhere. We need to get used to doing business in the noonday sun with everybody watching. It's not fun, but it's a definite trend.