This is a seventh in a series of opinion articles dealing with the necessity of reducing the size and cost of a bloated federal bureaucracy that has demonstrated its ineffectiveness and its inefficiency. These opinion articles are adapted from an original position paper, America’s Path to Prosperity, authored by the American Issues Policy Group.
“The United States Department of Agriculture (USDA), also known as the Agriculture Department, is the U.S. federal executive department responsible for developing and executing federal government policy on farming, agriculture, forestry, and food. It aims to meet the needs of farmers and ranchers, promote agricultural trade and production, work to assure food safety, protect natural resources, foster rural communities and end hunger in the United States and internationally.”[i]
In 1862, Abraham Lincoln established the Department of Agriculture without cabinet status. The first Commission of the Department was Isaac Newton, an agriculturalist. As with any growing bureaucracy, the Department’s friends began agitating for cabinet status, which was accomplished in 1887. Today, the Department, with a 2015 budget of $148 billion and 91,000 employees, focuses on:
- Farm and Agricultural Services (Commodity Credit Corporation, Federal Crop Insurance Corporation and Foreign Agricultural Service) at $16.7 billion.;
- Rural Development (Rural Business-Coorperative Service, Rural Utilities Service and Rural Housing Service) at $37 billion;
- Food, Nutrition and Consumer Service (Food and Nutrition Service, and Center for Nutrition Policy and Promotion) at $112.2 billion;
- Food Safety (Food Safety and Inspection Service) at $1.0 billion;
- Natural Resources and Environment (Natural Resources Conservation Service and the United States Forestry Service) at $9.0 billion;
- Marketing and Regulatory Programs (Animal and Plant Health Inspection Service, Agricultural Marketing Service, and Grain Inspection, Packers and Stockyards Administration) at $2.4 billion;
- Research, education and Economics (Agricultural Research Service, National Institute of Food and Agriculture, Economic research Service, National Agricultural Statistics Service and National Agricultural Library at $2.9 billion).
The Department of Agriculture distributes between $10 billion and $30 billion annually in cash subsidies to more than 800,000 farmers and landowners, with payments skewed to the largest producers. This largesse takes the form of eight different types of farm subsidies, from direct cash payments to market loans, to conservation subsidies, to farm crop insurance, to disaster aid, to export subsidies, to agricultural research and statistics.
There are several reasons to repeal farm subsidies. First, farm subsidies were designed to help the small individual farmer during the recession. Today, subsidies go to the largest producers whose average farm household income is 28% higher than the average of all U.S. households.[ii] Second, farm subsidies are a wealth distribution scheme. Farm subsidies result in overproduction, less efficient planting and land price inflation.[iii]
In 2006, the CBO reviewed major studies that surveyed the repeal of subsidies and trade barriers. The CBO concluded that U.S. and global economics would gain from the repeal of subsidies and trade barriers.[iv] In 1984, New Zealand, four times more dependent on farming than the United States, ended its farm subsidies. New Zealand farm productivity and profitability rocketed, destroying the old myth that farmers could not exists without subsidies.
Conclusion. When the Department was first formed 153 years ago, the United States was primarily an agrarian society. The Department of Agriculture should be substantially downsized.
Recommendations. Agricultural and rural subsidies should be abolished. The department’s food subsidy activities (SNAP, school lunches and WIC) are to be transferred Health and Human Services. The following programs should be eliminated:
Rural Development Services 37.0 B
Ten-Year Estimated Savings: $370.0 billion
[i] Department of Agriculture,
[ii] CATO Institute, http://www.downsizinggovernment.org/agriculture/subsidies