U.S.

Farm Subsidies 1

The Policy Implications of United States Farm Subsidies

Prepared for the 2008

National Debate Topic Selection Committee

National Federation of State High School Associations

Zane Schwarzlose and Russell Kirkscey

Blanco High School

Blanco, Texas
 U.S. Farm Subsidies 2

The Policy Implications of United States Farm Subsidies

Pollan (2007) observes:

To speak of the farm bill's influence on the American food system does

not begin to describe its full impact—on the environment, on global poverty, even

on immigration. By making it possible for American farmers to sell their crops

abroad for considerably less than it costs to grow them, the farm bill helps

determine the price of corn in Mexico and the price of cotton in Nigeria and

therefore whether farmers in those places will survive or be forced off the land, to

migrate to the cities—or to the United States….

And though we don't ordinarily think of the farm bill in these terms, few

pieces of legislation have as profound an impact on the American landscape and

environment. Americans may tell themselves they don't have a national land-use

policy, that the market by and large decides what happens on private property in

America, but that's not exactly true…. The health of the American soil, the purity

of its water, the biodiversity and the very look of its landscape owe in no small

part to impenetrable titles, programs and formulae buried deep in the farm bill.

Given all this, you would think the farm-bill debate would engage the

nation's political passions every five years, but that hasn't been the case. If the

quintennial antidrama of the ''farm bill debate'' holds true to form this year, a

handful of farm-state legislators will thrash out the mind-numbing details behind

closed doors, with virtually nobody else, either in Congress or in the media,

paying much attention…. This leaves our own representatives free to ignore the

farm bill, to treat it as a parochial piece of legislation affecting a handful of their

 U.S. Farm Subsidies 3

Midwestern colleagues. Since we aren't paying attention, they pay no political

price for trading, or even selling, their farm-bill votes….

But there are signs this year will be different. The public-health

community has come to recognize it can't hope to address obesity and diabetes

without addressing the farm bill. The environmental community recognizes that

as long as we have a farm bill that promotes chemical and feedlot agriculture,

clean water will remain a pipe dream. The development community has woken up

to the fact that global poverty can't be fought without confronting the ways the

farm bill depresses world crop prices. To change that, people will have to wade

into the muddy political waters of agricultural policy…. (p. 15)

Introduction

The debate over United States agricultural policy is one of the most important issues that

Americans know nothing about. Every time citizens consume food or wear clothes, they are

affected by American farm policy. Although the U.S. has historically enjoyed a thriving food

and fiber industry, the dynamic processes of industrialization and globalization have shrunk the

once-wide world of agriculture.

The emblem of American farm policy is its agricultural subsidies. Currently covering

anything from direct payments for corn growers to renewable energy research grants for ethanol

engineers, agricultural subsidies place a dollar value on our determined farm policies. However,

these methods of assistance are a double-edged sword: subsidies protect industries and develop

new markets but also harm other producers and place a burden on taxpayers.

Central to the debate on farm subsidies is the role the government should play in

controlling (or manipulating) the free market economy. Deciding agricultural policy is
 U.S. Farm Subsidies 4

oftentimes a balancing act between whether to protect the producers or consumers of agriculture.

Evaluating these issues would serve as a valuable educational experience in any high school

debate round.

History and Background of Agricultural Subsidies

U.S. farm policy has transformed due to changes in economic conditions and political

goals. From the public-lands policy of many American Indian tribes to World Treaty

Organization (WTO) compliance of cotton subsidies, U.S. agricultural policy has come a long

way. Knutson, et al (2007) delineate the following eras:

Settlement Period (1776-1929)

During this period, the agriculture industry made a monolithic impact on the formation of

the United States. The Revolutionary War was sparked by a variety of factors including a tax on

tea—an agricultural product—and the refusal of the Crown to allow colonists to settle past the

Appalachians. After the Revolution, the Homestead Act allowed settlers ownership rights to

Western lands in exchange for farming it. The United States Department of Agriculture (USDA)

was created in 1889 to foster and sustain this vital industry. Land-grant universities were

authorized in 1862 under the Morrill Act to allow rural youth a chance to attend college.

New Deal (1929-1954)

After the Great Depression, the Roosevelt Administration established large government

programs to bend the market and secure farmers’ income. In 1933, a “Farm Bill” created price

supports to subsidize farmers at the previous market rates. The bill was later found to be

unconstitutional and a new Farm Bill was passed in 1938 to meet the requirements of the

Supreme Court. Every Farm Bill since that year is technically an extension of that legislation.

Flexible Price Supports (1954-1970)

 U.S. Farm Subsidies 5

The aforementioned price supports incentivized the agriculture industry to produce more

food, which helped combat the increased demand during the World War II. After the war,

mechanization helped to increase production even further. The previous price supports were

decreased to help the global marketability of U.S. farm products. These price supports were

termed “flexible” because they were meant change each year to serve as a price floor if the world

market turned sour.

Direct Payments (1970-Present)

In the early 1970s instead of purchasing food stocks to increase the market price, the U.S.

government began to allow market prices to fluctuate and offer “direct payments” to farmers as a

way to prevent foreign sellers from benefiting from American farm subsidies. This policy

greatly depressed food prices and made the U.S. a major player in the world market. In 1996

payments were decoupled from production meaning that farmers could grow whatever crops they

pleased and apply for another crop’s subsidy based on what was historically grown on the land.

Today, farming is being shaped by a variety of factors. The U.S.’s entrance into the

WTO has hindered its ability to provide domestic subsidies. Mega farms and mechanization

have resulted in subsidizing more dollars to fewer people since current programs are tied to

production rather than the number of workers or other quantitative measurements. Gaul, Cohen,

and Morgan (2006) note some of these trends:

Today, most of the nation's food is produced by modern family farms that are large

operations using state-of-the-art computers, marketing consultants and technologies that

cut labor, time and costs. The owners are frequently college graduates who are as

comfortable with a spreadsheet as with a tractor. They cover more acres and produce

more crops with fewer workers than ever before. The very policies touted by Congress as
 U.S. Farm Subsidies 6

a way to save small family farms are instead helping to accelerate their demise,

economists, analysts and farmers say. That's because owners of large farms receive the

largest share of government subsidies. They often use the money to acquire more land,

pushing aside small and medium-size farms as well as young farmers starting out….

Large family farms, defined as those with revenue of more than $250,000, account for

nearly 60 percent of all agricultural production but just 7 percent of all farms. They

receive more than 54 percent of government subsidies. And their share of federal

payments is growing—more than doubling over the past decade for the biggest farms. (p.

A01)

Current State of U.S. Agricultural Subsidies

Due to America’s diverse agricultural background, its subsidies are equally as diverse.

Current U.S. agricultural subsidies attempt to accomplish a variety of economic goals. These

programs may be subdivided in three main categories.

Subsidies that Recognize Agriculture as an Industry Uniquely Requiring Aid

The first justification of some farm subsidies is that the food and fiber industry is

uniquely situated to require federal aid. This reason is admittedly rather weak given that the

median farm income is about double the median income of all families in the United States.

However, the high price of capital and high risk of doing business makes this a more defensible

argument.

Farming is a high-cost business and a significant percentage of these costs must be

invested up-front as a new producer is getting started. Land values and rental rates in the

major program crop regions have significantly increased. National average farmland

values have increased 65 percent in the past five years, from $1,150 per acre in 2001 to
 U.S. Farm Subsidies 7

$1,900 per acre in 2006. Average cropland rental rates increased from $71 per acre in

2001 to $79 per acre in 2006, or 11 percent over the same period. The amount and cost

of equipment, including planting, cultivation and harvest machinery, exemplifies the

financial barriers to entering production agriculture. The price of a representative front-

wheel-assist 250 horsepower tractor ranges from $180,000 to $200,000. Harvest

equipment may be even more expensive, with a standard combine often costing more

than $200,000. Lease costs are substantial as well. (USDA, 2007a)

Subsidies that Attempt to Regulate the Quality or Quantity of Commodities for Other Motives

Another argument proposes that the U.S. should subsidize its agriculture industry to meet

quality and quantity goals. Food safety is a growing concern in America, spurred by the threat of

highly-infectious diseases. In addition, direct payments and other commodity programs

incentivize producers to charge lower prices to decrease poverty and hunger. Unfortunately,

these measures price out imports from cash-strapped low-income countries. The cheapened

prices also decrease world trade on balance.

Subsidies that Attempt to Remedy Market Externalities

A final interesting argument for agricultural subsidies is the remediation of market

externalities. Externalities are the effects of an action that are for some reason excluded from the

free market. In agriculture, the use and abuse of natural resources is a prime example. In the

free market, farmers do not have to pay a fee to farm environmentally-sensitive land. Subsidies

such as the Conservation Reserve Program attempt to decrease poor planting practices.

Nevertheless, even these programs can be mismanaged, and the number of acres to be conserved

can be estimated incorrectly.

Range and Scope

 U.S. Farm Subsidies 8

Senator Tom Harkin (2006) remarks:

There are 2.2 million farms in the United States on 933 million acres of farm and ranch

lands. Approximately 50 million Americans—17 percent of the population—live in rural

America, and 2 million people, or 1.4 percent of the nation's work force, are directly

involved in farming and ranching. Another 22 million, or 15 percent, are involved in the

production, manufacturing, transport and marketing of the nation's food and fiber. Last

year, the agricultural sector added almost $145 billion to the U.S. economy. Another

$1.1 trillion is added to the U.S. economy by the manufacturing, transport and marketing

segments. The Department of Agriculture estimates that net farm income in 2006 will be

approximately $55 billion. U.S. agriculture is one of the few sectors that exports more

than it imports, resulting in a trade surplus of $4.8 billion in 2005. And if anyone doubts

the impact that U.S. agricultural policy has on their households, consider this: U.S.

families spend 8 percent of disposable income on their household food budget, lower than

any other nation…. Others spend one-third to one-half to three-fourths of their income.

U.S. farm policy costs pennies per meal and accounts for little more than one-half of 1

percent of the U.S. budget.

The U.S. farm policy is a remarkably low-ticket item in terms of the entire federal

budget. These dollars help decrease the cost of living and provide jobs for millions of

Americans. However, jobs subsidized to be fulfilled in America deprive foreign laborers of

similar work. The game of trade is not an easy one to play.

General Harms Scenarios

Even though we suggest a “domestic” limitation to the resolution, the impacts of

American farm policy are felt both at home and abroad. Domestically, farm programs draw
 U.S. Farm Subsidies 9

illegal immigrants and foreign workers under the H-2 visa program. The bountiful harvest of

U.S. farms has also been suggested to be the root cause of the obesity epidemic. In addition, the

high cost of entry caused by subsidies makes young workers unlikely to begin farming. Finally,

U.S. farm programs facilitate the formation of mega farms that are displacing the mythical

family farm. These farms are also painfully effective at consuming vast amounts of natural

resources and producing extensive pollution.

Admittedly, some of the most compelling harms scenarios occur outside the United

States. First, inexpensive food in America does not equate to inexpensive food abroad. The U.S.

is such a willing trade partner that smaller and poorer countries will alter their planting decisions

to suit the needs of America rather than their own people. This is a quick and easy recipe for

nation-wide starvation. Agricultural subsidies have also constrained the United States’

bargaining abilities in the Doha Round of the WTO trade negotiations. The loss of international

credibility could arguably create an increased necessity for American military presence. Finally,

the industrialization of farming has opened the door for unintended environmental harm and

predicted climate change. Stiglitz (2006) maintains:

Americans like to think that if poor countries simply open up their markets, greater

prosperity will follow. Unfortunately, where agriculture is concerned, this is mere

rhetoric. The US pays only lip service to free-market principles, favouring Washington

lobbyists and campaign contributors who demand just the opposite. Indeed, it is

America's own agricultural subsidies that helped kill, at least for now, the so-called Doha

development round of trade negotiations that were supposed to give poor countries new

chances to enhance their growth. Subsidies hurt developing country farmers because

they lead to higher output—and lower global prices. The Bush administration -
 U.S. Farm Subsidies 10

supposedly committed to free markets around the world—has actually almost doubled the

level of agricultural subsidies in the US. Cotton illustrates the problem. Without

subsidies, it would not pay for Americans to produce much cotton; with them, the US is

the world's largest cotton exporter. Some 25,000 rich American cotton farmers divide

$3bn to $4bn in subsidies among themselves—with most of the money going to a small

fraction of the recipients. The increased supply depresses cotton prices, hurting some 10-

million farmers in sub-Saharan Africa alone. Seldom have so few done so much damage

to so many. (p. 13)

Topicality

It is our intent that few topicality arguments will emerge in the resolution. Only two

terms should come under discussion: “domestic” and “agriculture subsidies.” “Domestic” is a

straightforward term, especially since only 2% of the USDA budget is used in foreign markets.

“Agriculture subsidies” is a more elusive term. All of our definitional research indicates that

monetary benefit must be for the purpose of helping agricultural production. Under this

definition, many facets of the current Farm Bill are excluded, such as Food Assistance, Rural

Development, and many Conservation and Forestry Programs. In many cases the federal

government and other actors will use “farm” and “agriculture” interchangeably when referencing

subsidies. Although the terms are almost never delineated, in cases where a distinction is made

“farm” is described as a subset of “agriculture.” The word “farm” could also be used to exclude

ranching and fiber production. Making this exclusion is not our intent.

The Farm Bill Proposal (USDA, 2007a) exhibits that far less than half of its entitlement

funding would be debatable under our resolution. Specifically, the 26 percent of subsidies
 U.S. Farm Subsidies 11

labeled “Farm and Commodity Programs” in the chart below will provide the most topical

debates:

USDA Budget

FY 2006 Budget Outlays

International
Rural Development 2%
3% Farm and Commodity
Programs
26%
Conservation and Forestry
11%
Research, Inspection and
Administration
4%

Food Assistance
54%

Affirmative Case Areas

In many ways, commodities epitomize the arguments for and against farm subsidies and

are thus central to the topic area. Commodities such as corn and soybeans are subsidized in an

effort to promote production and counter rapid price fluctuations. Notably, sugar and milk are

subsidized at a high rate while livestock and specialty crops such as fruits and vegetables

currently exist without much government aid. (The 2007 Farm Bill includes provisions for aiding

specialty crop growers, but this aid would be in the form of foreign marketing assistance.)

The system of farm payments is Byzantine. The current payment system generally

operates under a direct payment system. Congress legislates a target price, and if the market
 U.S. Farm Subsidies 12

price is lower, farmers are paid the difference. Driven by pressure from the WTO, these

payments have become gradually more decoupled, mitigating some market-distorting effects.

Closing Loopholes in the Status Quo

Today many proposals from Congress and lobby groups have yet to be implemented.

Proponents of the free market support “Program Buyouts” similar to the termination of tobacco

subsidies. Pertinent case areas could also switch payments to a lump sum rather than a

production-based measure of support. Cases could also close many of the loopholes inevitably

found in federal legislation.

The 2002 farm bill set loan rates at fixed levels significantly above market prices year

after year for many crops. Some claim that these high loan rates encourage farmers to

plant more of these crops - further increasing supply and thus decreasing prices. These

payments can also encourage attempts to produce crops in environmentally-sensitive,

drought-prone lands. Furthermore, farmers can take advantage of short-term market

events (such as an export terminal closing due to a hurricane) to lock-in artificially high

loan deficiency payments, while actually selling the commodity later at prices well above

the loan rate. This allows the market price received, combined with the loan deficiency

payment, to far exceed the intended loan rate protection. (USDA, 2007b)

Crop Insurance Cases

Another viable case area attempts to solve the problems inherent to crop insurance

programs. Currently, farmers do not have to purchase federally subsidized crop insurance. In

the event of a major catastrophe, Congress often appropriates disaster aid to all farmers in an

area, not just the insured. This leaves farmers who purchase insurance wondering why insurance

is even necessary. There is a growing movement to require crop insurance to be mandatory.

 U.S. Farm Subsidies 13

Farmers from many Midwestern states consider this a ridiculous idea because of the static nature

of their climate and other growing conditions.

The Federal crop insurance program has been amended over the years to help farmers

deal more effectively with the effects of natural disasters and to reduce the need for ad

hoc disaster assistance. While program participation and coverage levels purchased by

farmers have increased, Congress has still provided ad hoc disaster assistance. Since

2000, over $10 billion has been provided in ad hoc disaster assistance, indicating further

program changes are needed to obviate the need for such assistance. As Gene from

Nebraska suggested, “Require nationwide participation by all ag producers in the crop

insurance program. The goal here is to eliminate all crop disaster programs….” In

addition, the government subsidizes about 60 percent of producer premiums. These large

and growing costs have raised concerns about the high level of program costs per dollar

of assistance provided to producers. (USDA, 2007b).

Environmental Cases

Affirmatives will also be able to access cases with a more environmental focus. The

federal government currently subsidizes farmers for not growing on environmentally sensitive

lands. Even though crops cannot be grown on enrolled acres, naturally occurring biomass is still

collected for the purpose of energy production.

General CRP sign-ups would continue to give priority to environmentally sensitive land.

However, USDA would also prioritize farmland planted in a biomass reserve of perennial

crops used for cellulosic energy production. Currently, over 27 million acres of

Conservation Reserve Program (CRP) contracts are on farmland capability classes I to

IV, lands that are suited for growing crops. These lands could continue to provide various
 U.S. Farm Subsidies 14

environmental benefits while being used for biomass production. These lands would also

retain the ability to fulfill wildlife habitat needs. The program would establish clear

requirements that biomass could only be harvested after nesting season. (USDA, 2007b)

Commodity Cases

Specific commodities would also supply a bounty of cases to affirmative teams. For

example, sugar subsidies allow producers to receive nearly double the market price. The 2007

Farm Bill proposes to partially relax the subsidies but many argue that the industry needs no such

protection. In addition, the U.S. cotton subsidies were ruled in violation of WTO trade sanctions

and need to be reduced. Affirmatives will be able to choose from a plethora of specific payment

and commodity types. The Economist (2006) provides an example:

Even some of the biggest recipients of federal cash say today's system won’t do. The

Iowa Corn Growers Association, for instance, recently voted against extending the 2002

farm bill. It claims to want a safety net for farmers that is more "trade compatible" and

"market-oriented". Given that corn farmers got 46% of the subsidies under the farm bill,

and that Iowa farmers, thanks to the state's early presidential caucus, wield

disproportionate political clout, this sounds too good to be true. It is. America's farmers

have not been seized by sudden guilt. Instead, they are pre-empting pressure to change a

system that is increasingly viewed as unfair, expensive and against the rules of the World

Trade Organisation (WTO). The federal government spent over $20 billion on farm

subsidies last year: much less than the European Union lavishes on its mollycoddled

farmers, but more than Washington spent on foreign aid and almost twice what it spends

on subsidising college for poor children. (p. 35)

 U.S. Farm Subsidies 15

Largely Non-Topical Case Areas

We do specifically think some case areas are blatantly non-topical. First, international

trade doubtlessly affects any decision made in agricultural policy. However, direct action with

the WTO, NAFTA, or CAFTA would violate the “domestic” portion of the resolution and

capture negative counterplan ground. Moreover, we believe that food and nutrition programs

such as WIC and bioterrorism protection would be mostly nontopical since they exist to aid an

entity other than agricultural producers. There are also cases that could be topical based on plan

text. Crop insurance and disaster payments arguably subsidize a cost of doing business for

producers. Research and extension activities provide financial aid to farmers, but whether this is

a subsidy in the truest sense of the word is open to interpretation.

Negative Ground

Case Arguments

Negative teams may use a variety of case-based arguments. While the most effective

positions will be specific to each case, good generic case arguments do exist. For example,

market capitalization states that decreasing subsidies would merely drop the price of farmland

making farming exactly as profitable as before the affirmative plan. USDA enforcement

arguments are also viable given the bureaucratic nature of the organization. Finally, negative

teams can mitigate solvency by arguing that farmers will merely change their planting decisions

and switch to a similarly profitable crop.

Disadvantages

Disadvantages to decreasing farm subsidies will provide negative teams with a variety of

offensive arguments. Interestingly, the topic lends itself to a rarely-found coherent internal link

scenario for political arguments. The agriculture industry is a large receiver of pork barrel
 U.S. Farm Subsidies 16

funding and politicians are at times overeager to trade votes in exchange for helping their

constituents. The interaction between politics and the power of lobbyists and special interest

groups offer another link scenario. Finally, “Fast Track” or the Trade Promotion Authority that

allows the President to quickly bargain with foreign entities without congressional approval has

been extensively used in bilateral negotiations of subsidy cessation. Schatz (2007) suggests:

Emergency spending bills are called ''Christmas trees,'' for the unrelated ''ornaments'' that

are added by members of Congress. (They are exempt from budget rules and are almost

never vetoed, making them magnets for pork.) The nickname is usually not literal, but the

Senate's version of the fiscal 2007 supplemental appropriations bill that passed yesterday

includes, among scores of other nonessential items, money for Christmas-tree growers.

Behind all their lofty rhetoric about the Iraq war and bringing home the troops, members

of the House and Senate were busy tacking on $20 billion and $18.5 billion respectively

in unrelated spending to President Bush's $103 billion request. (He intends to veto the

bill.) Despite their campaign talk about earmark reform last fall, the new Democratic

leadership shamelessly used pork to buy votes—before the vote, Representatives Collin

Peterson of Minnesota and Peter DeFazio of Oregon acknowledged that add-ons for their

districts would influence their decisions. The heavyweights also led by example: the

Senate majority leader, Harry Reid of Nevada, added $20 million to eradicate Mormon

crickets, and David Obey of Wisconsin, the House Appropriations Committee chairman,

came away with $283 million for the Milk Income Loss Contract Program. (p. A 27)

Disadvantages may also arise from the fact that agriculture is the only major economic

sector to export more than it imports. Cutting subsidies would further weaken the U.S. dollar

and make the investment in foreign countries more appealing.

 U.S. Farm Subsidies 17

Counterplans

Interestingly, negative teams will be able to run counterplans that solve for the same

harms scenarios as affirmatives. Much evidence exists stating that increased subsidies are

necessary to solve some social ill. For example, in an effort to reduce foreign oil dependency,

affirmatives could decrease corn subsidies to make farmers search for more viable sources of

ethanol (e.g., switch grass and pinecones). A negative team could easily read a counterplan

doubling the amount of corn subsidies stating that energy stability is more important than overall

efficiency.

Negative teams also have a choice of other-actor counterplans. Perhaps the most viable

is enforcement through the Environmental Protection Agency (EPA.) This agency has a history

of enforcing programs that increase farmers’ costs of doing business. Nongovernmental

agencies and foreign actors such as the WTO could also work to decrease U.S. subsidies.

Kritiks

Even though the world of agriculture may not seem to be the best environment for critical

arguments, the topic does lend itself to many reasonable kritiks. Deep Ecology, eco-feminist,

and anthropocentric positions will work well. Particularly, teams will be well-suited running

updated Maoist, Marxist, or other anticapitalist arguments based on the affirmative burden to, at

some level, support landed wealth and the free market. Affirmatives could counter with neo-

Jeffersonian arguments that agriculture is necessary for a sustainable democratic society.

Chairman Mao Tse Tung (1972) asserts:

Those peasants who lose their land and those who remain in poverty will complain that

we are doing nothing to save them from ruin or to help them overcome their difficulties.

Nor will the well-to-do middle peasants who are heading in the capitalist direction be
 U.S. Farm Subsidies 18

pleased with us, for we shall never be able to satisfy their demands unless we intend to

take the capitalist road. Can the worker-peasant alliance continue to stand harm in these

circumstances? Obviously not. There is no solution to this problem except on a new

basis. And that means to bring about, step by step, the socialist transformation of the

whole of agriculture simultaneously with the gradual realization of socialist

industrialization and the socialist transformation of handicrafts and capitalist industry and

commerce; in other words, it means to carry out co-operation and eliminate the rich-

peasant economy and the individual economy in the countryside so that all the rural

people will become increasingly well off together. We maintain that this is the only way

to consolidate the worker-peasant alliance. (pp. 26-27)

Another kritikal ground area is race relations. U.S. farms are also almost exclusively owned by

white males:

Minorities represent around 5.1 percent of all farmers and ranchers in the United States. They

operate almost 80 million acres, 8.4 percent of U.S. farmland, which is an 8 million acre

increase from 1997 to 2002. The 1992 farm bill took the important step of establishing the

Office of the Assistant Secretary for Civil Rights. This new office has worked with all USDA

mission areas to help make tremendous strides in reaching out to help SDA farmers. But

more can be done. Extensive outreach and targeted assistance are appropriate to ensure these

producers are aware of and participate in these programs. As Catherine from Mississippi

said, ‘Previous farm policies have forced many minority producers to sell their land only to

[be] taken in by large corporations.’ (USDA, 2007a)

 U.S. Farm Subsidies 19

Possible Resolutions

1. Resolved: That the United States Federal Government should substantially decrease its

domestic agricultural subsidies.

2. Resolved: That the United States should substantially decrease its domestic farm

subsidies.

3. Resolved: That the United States Federal Government should substantially change its

domestic agricultural subsidies.

4. Resolved: That the United States Federal Government should substantially change its

domestic farm subsidies.

 U.S. Farm Subsidies 20

Appendix: Definitions

agricultural subsidies. (2004). In The Columbia Encyclopedia. Retrieved March 06, 2007, from
http://www.xreferplus.com.libproxy.txstate.edu/entry/4256966agricultural subsidies.

Financial assistance to farmers through government-sponsored price-support programs.

Beginning in the 1930s most industrialized countries developed agricultural price-support
policies to reduce the volatility of prices for farm products and to increase, or at least stabilize,
farm income. In food-exporting countries, such as the United States and France, agricultural
subsidies have been designed primarily to increase farm income, either by raising the long-term
level of prices above free-market levels or by providing direct payments to farmers. The sale of
agricultural products to developing nations at below market prices has often had a devastating
effect on the ability of farmers in those nations to prosper, and the continuation of such subsidies
has become a stumbling block to efforts to dismantle international trade barriers.

Once introduced, subsidies to maintain prices have proved extremely difficult to end. In France,
farmers have vigorously protested decreases in subsidies that have made them the second largest
food exporter after the United States. Agricultural subsidies in the United States, Japan, and the
European Community (now the European Union) were issues of contentious debate in the
Uruguay (1986-94) round of international trade negotiations under the General Agreement on
Tariffs and Trade (GATT) and remain so in the World Trade Organization. Despite its long
history of farm price supports, the U.S. Congress in 1996 passed the Freedom to Farm Act,
which eliminated such agricultural subsidies in favor of fixed payments to farmers. The
legislation failed to decrease payments to farmers, however, and by 2000 aid to farmers
(including so-called emergency payments) had reached more than $22 billion, three times the
1996 level. A new federal farm bill in 2002 abandoned the 1996 goal of reducing farm payments,
increasing base program expenditures by 80%.

agricultural subsidies. (1995). In Dictionary of Economics, Wiley. Retrieved March 06, 2007,
from http://www.xreferplus.com.libproxy.txstate.edu/entry/2763972

Government support (e.g., grants) to farmers to encourage agricultural growth.

agricultural subsidies. (2001). Richard Lowitt "Subsidies, Agricultural" The Oxford

Companion to United States History. Paul S. Boyer, ed. Oxford University Press 2001. Oxford
Reference Online. Oxford University Press. Texas State University - San Marcos. 6 March
2007
http://www.oxfordreference.com/views/ENTRY.html?subview=Main&entry=t119.e1487

The earliest government subsidies for farmers, beginning in 1890, benefited cane-sugar and beet-
sugar growers. The first general subsidy program was established in 1933 under the
Agricultural Adjustment Administration, part of the New Deal's economic recovery plan. The
government offered cash payments to farmers to reduce their output of such basic commodities
as hogs, wheat, corn, cotton, rice, and dairy products. The goal was “parity,” by which farmers'
purchasing power would match what it had been in the prosperous 1909–1914 years. Taxes on
 U.S. Farm Subsidies 21

grain mills and other food processors (ultimately passed along to consumers) financed the
subsidies. As southern cotton growers reduced production in return for federal payments,
sharecroppers and tenant farmers were driven from the land.

Farmers received two forms of subsidies, cash payments for taking land out of production and
direct price supports through government purchase, loans, and management of surpluses. The
Commodity Credit Corporation (CCC), created by executive order in 1933, lent farmers money
with their crops as collateral. If prices held steady or increased, the farmer paid off his loan. If
not, the CCC marketed the crop and absorbed the loss. Similar subsidy programs lasted into the
1990s. Government subsidies tended to concentrate production of basic crops in the hands of
more efficient, larger owners. In 1970, for example, nine individuals or corporations each
received over a million dollars in crop-reduction subsidies.

In 1981, President Ronald Reagan proposed to end production controls and target prices, the
mechanisms that had sustained the agricultural economy since the early New Deal Era. But huge
surpluses and congressional opposition forced the administration to retreat. A 1982 program
combined a smaller acreage-allotment program with guaranteed prices. Under it, the Reagan
administration paid farmers more not to grow crops than any previous administration. Although
the 1995 Freedom to Farm Act officially ended most agricultural subsidies, farmers continued to
receive billions of dollars in phase-out payments and “emergency relief” appropriations. An
elaborate milk price-support program remained in place as well.

domestic. (2003). In The American Heritage® Dictionary of the English Language. Retrieved
May 21, 2007, from http://www.xreferplus.com.libproxy.txstate.edu/entry/4081918

adj.
1. Of or relating to the family or household: domestic chores.
2. Fond of home life and household affairs.
3. Tame or domesticated. Used of animals.
4. Of or relating to a country's internal affairs: domestic issues such as tax rates and highway
construction.
5. Produced in or indigenous to a particular country: domestic oil; domestic wine.
n.
1. A household servant.
2.
a. Cotton cloth.
b. Household linens. Often used in the plural.
3. A product or substance discovered in, developed in, or exported from a particular country.

domestic. (1996). In Merriam-Webster's Dictionary of Law. Retrieved May 21, 2007, from
http://www.xreferplus.com.libproxy.txstate.edu/entry/5175076

1 : of or relating to the household or family a ~ servant ~ relations - see also family court
2 : of, relating to, or originating within a country or state and esp. one's own country or state the
state has personal jurisdiction over ~ corporations - compare foreign, municipal
 U.S. Farm Subsidies 22

(2004). In Dictionary of Politics and Government. Retrieved May 21, 2007, from
http://www.xreferplus.com.libproxy.txstate.edu/entry/6504152

• referring to the home country or to the country where a business has its head offices

domestic. (2004). In Merriam-Webster's Collegiate(R) Dictionary. Retrieved May 21, 2007,

from http://www.xreferplus.com.libproxy.txstate.edu/entry/5231154
1
a : living near or about human habitations.
b : tame, domesticated <the ~ cat>.
2 : of, relating to, or originating within a country and especially one's own country <~ politics>
<~ wines>.
3 : of or relating to the household or the family <~ chores> <~ happiness>.
4 : devoted to home duties and pleasures <leading a quietly ~ life>.
5 : indigenous. - do mes ti cal ly \-ti-k( -)l \ adverb.

domestic. (2000). In Dictionary of Law, Peter Collin Publishing. Retrieved May 21, 2007, from
http://www.xreferplus.com.libproxy.txstate.edu/entry/992858

(a) referring to a family.

domestic premises house, flat, etc., used for private accommodation.
domestic proceedings court case which involves a man and his wife, or parents and children.
(b) referring to the market of the country where a business is situated.
domestic consumption consumption on the home market.
domestic market market in the country where a company is based.
domestic production production of goods in the home country.
(c)
US domestic court court which covers the district in which a defendant lives or has his address
for service.

farm subsidies A Dictionary of Economics. John Black. Oxford University Press, 2002. Oxford
Reference Online. Oxford University Press. Texas State University - San Marcos. 6 March
2007
<http://www.oxfordreference.com/views/ENTRY.html?subview=Main&entry=t19.e1162>

Subsidies to farmers. These may take the form of price support payments, to increase farm
incomes per unit of output, or direct payments to farmers, for example as compensation for
taking land out of cultivation. Such subsidies are designed to increase farm incomes, and slow
down the tendency in modern economies for farmers to leave the land. Whether such subsidies
are called food or farm subsidies, the benefits are divided between consumers, farmers and
landlords.

subsidy. (2003). In The American Heritage® Dictionary of the English Language. Retrieved
May 21, 2007, from http://www.xreferplus.com.libproxy.txstate.edu/entry/4136717
 U.S. Farm Subsidies 23

1. Monetary assistance granted by a government to a person or group in support of an enterprise

regarded as being in the public interest.

2. Financial assistance given by one person or government to another.

3. Money formerly granted to the British Crown by Parliament.

subsidy. (2000). In The Penguin English Dictionary. Retrieved May 21, 2007, from
http://www.xreferplus.com.libproxy.txstate.edu/entry/1177087

1. a grant or gift of money, e.g. one made by a government to a person or organization to assist
an enterprise deemed advantageous to the public.
2. in former times, a sum of money granted by Parliament to the Crown and raised by special
taxation.

subsidy. (2004). In The Columbia Encyclopedia . Retrieved May 21, 2007, from
http://www.xreferplus.com.libproxy.txstate.edu/entry/4301563

Financial assistance granted by a government or philanthropic foundation to a person or

association for the purpose of promoting an enterprise considered beneficial to the public
welfare. Subsidies were used in England in the later Middle Ages, when Parliament granted
funds to the king to augment or replace customs and other taxes collected by royal prerogative;
such early subsidies later became the means by which the power of taxation was taken from the
king and lodged in Parliament. At first a nationwide levy, it became (in the reign of Charles II) a
land tax levied annually without the intervention of a parliamentary vote. In France the king was
able to retain his control and acquire financial powers that made him independent of any subsidy
granted by the States-General. The term subsidy has had widely varied usage in the 20th cent.
Subsidies may be granted to keep prices low, to maintain incomes, or to preserve employment.
They are most important as grants to private corporations for performing some public service,
such as to shipping companies and airlines for carrying the mail or to railroads for maintaining
passenger service. These are often required where a necessary public service, particularly one
that might otherwise not be profitable, is granted funds to remain in operation. In the United
States, the National Railroad Passenger Corporation (Amtrak) receives federal subsidies for its
intercity railway network. American cities have frequently subsidized transit companies to
induce them to provide metropolitan transportation facilities for the public. Other commonly
subsidized enterprises include agriculture (see agricultural subsidies), business expansion, and
housing and regional development. In the United States, 5 million households received housing
assistance in 1998. Medical and educational institutions are among the largest recipients of
subsidies (see foundation); in 1997, for instance, federal spending in the United States paid 46%
of national medical costs. Subsidies have also been granted by one country to another country to
aid it in pursuing a war effort, to gain its goodwill, or to help stabilize its economy. Very similar
to a subsidy is a bounty, except that it usually takes the form of a per-unit premium or reward for
a service already performed.
 U.S. Farm Subsidies 24

subsidy (2004). In Merriam-Webster's Collegiate(R) Dictionary. Retrieved May 21, 2007, from
http://www.xreferplus.com.libproxy.txstate.edu/entry/5282870

a : a sum of money formerly granted by the British Parliament to the crown and raised by special
taxation.
b : money granted by one state to another.
c : a grant by a government to a private person or company to assist an enterprise deemed
advantageous to the public.
 U.S. Farm Subsidies 25

References

Gaul, G. M., Cohen, C., & Morgan, D. (2006, December 21). Federal subsidies turn farms into

big business. Washington Post. p. A01.

Harkin, T. (2006). What should the priorities be in the reauthorizing of the farm bill? Roll Call,

December 4, 2006.

Knutson, R. D., Penn, J. B., Flinchbaugh, B. L., & Outlaw, J. L. (2007). Agricultural and food

policy (6th ed.). New York: Prentice Hall.

Mao, T. (1972), Quotations from Chairman Mao Tsetung (2nd vest ed.). Peking: Foreign

Languages Press.

Pollan, M. (2007, April 22). You are what you grow. New York Times Magazine. p. 15.

Schatz, T. (2007, March 30). Pork goes to war. The New York Times. p. A 27.

Stiglitz, J. (2006). The tyranny of King Cotton. Business Day. P. 13.

Uncle Sam's teat: Farm subsidies. (2006, Sept. 9). The Economist, 380, 35.

USDA (2007a). Fact sheet: A commitment to rural America: Release No. 0019.071. Retrieved

May 21, 2007 from http://www.usda.gov/wps/portal/usdahome?

contentidonly=true&contentid=2007/01/0019.xml

USDA (2007b). 2007 Farm bill proposals. Retrieved May 21, 2007 from http://www.usda.gov/

documents/07finalfbp.pdf