Reforming Agricultural and/or Food Safety Policy
The Stoa policy topic on agriculture and/or food safety has been selected:
The United States federal government should substantially reform its agricultural and/or food safety policy in the United States.
Two earlier posts discussed this resolution. Links to these post below. Future posts will be on the agriculture/food safety topic. (And later this month this and earlier debate topic blogs are scheduled to be migrated to an updated EconomicThinking.org site.)
• Food Safety: Certification or Regulation? (May 15, 2016) Third-Party Certification is key. Big grocery chains like Kroger and Safeway would like to believe the farms and food-processors who deliver food to their shelves each day are clean and modern facilities with strict procedures to keep equipment clean and free of microbes. However, instead of wishful thinking the food industry runs on “trust, but verify.” They can’t afford to just believe what suppliers claim, nor can most afford to hire their own inspectors to investigate each supplier. And they can’t rely on government agencies like the FDA or USDA alone, since these politicized and bureaucratic organization have many incentive and information problems, and are unlikely to be up to speed with the latest technologies and data analytics.
• U.S. Federal Government Agriculture and/or Food Safety Reform (May 5, 2016) Public Choice economics explains the dynamics of federal agricultural policies: federal subsidies and policies benefits flow to a few thousand corporate farmers, lobbyists, and federal workers, while high(er food costs are distributed across millions of consumers.
Policy creates politics. It’s not a new observation, but it is a somewhat counterintuitive one. Normally, we think of the causation as running the other way: Politics is often conceived of as the process of competing for the authority to determine policy. Politics, as we normally think about it, causes policy
But as political scientist E.E. Schattschneider first observed in the 1930s, the causal arrow runs the other way, too. In his study of tariff legislation, Schattschneider noted that tariffs “stimulate the growth of industries dependent on this legislation for their existence, and these industries form the fighting legions behind the policy”; conversely, they wound other industries, which must either adapt or perish. In both cases, the policy — a tariff — has altered the political power of various actors, which will, in turn, shape the policy-making landscape going forward. “Is this not true, in varying degrees, of nearly all other policies also?” Schattschneider asked. Indeed, in the intervening decades, numerous studies have been devoted to tracing this dynamic in other areas.
The period of U.S. farm bills where the instruments were designed around compensation policies that used price support and supply management programs allowing farmers to remain in production during long periods of low prices — the result of four centuries of publicly sponsored developmental policies — ended with the adoption of the 1996 farm bill. …
The result was four years of Emergency payments and huge loan deficiency payments (LDPs). With LDPs, farmers were paid the difference between the loan rate (that is, what used to be the support price) and the posted market price. As a result, large government payments were paid out for every bushel produced and no grain was taken off the market. With all of the year-ending stocks remaining on the open market, prices remained in a four-year trough and the farm-bill-to-end-all-farm-bills was terminated a year early and replaced with the 2002 farm bill. The 2002 farm bill fixed the level of decoupled payments rather than allowing them to decline over time, and added back a program in which payments were made when major-grain prices fell below specified levels.
— Greg Rehmke, Economic Thinking, grehmke[at]gmail.com