Re: subsidies and sustainability

Phil Crawford (crawford@wsu.edu)
Wed, 30 Sep 1998 20:38:19 -0700

Good points, Hal. We ought to encourage people to quit using the s-word,
i.e., subsidies. It's almost like the other s-word, sustainable. A lot of
non-farm benefactors of public support, like the auto industry, timber,
mining, etc. wouldn't think of using such a word to describe all the public
breaks they have gotten and continue to get. Around these parts, I think
the biggest problem among farmers who were big recipients of subsidies was
what they had to give up to keep getting the subsidies. Creativity and
change were minimal. It was not the subsidies themselves that were the
problem, but the restrictions that curbed change in crops and practices.
Since Freedom to Farm passed, the innovation is remarkable among farmers
who had done things pretty much the same for a long, long time. It is
unfortunate that this innovation comes at a time when prices are so low,
but those who are changing will still come out better than those who are
not. What would encourage more rapid innovation now is public support for
the changes farmers are trying to make, especially the young, risk takers
who are under capitalized and can't run on empty very long. And many of
these changes portend great environmental benefits. Thus, we ought to
focus on two things: what we want the subsidies to do for us and how we
can set them up with the least undesirable side effects. By casting the
decision as either subsidies or no subsidies, which seems to politically
attractive these days, we simply eliminate a very valuable tool and put
ourselves and our farmers at an international disadvantage.

At 04:14 PM 9/28/98 -0000, Hal Hamilton wrote:
>There was a SANET post last week suggesting that if farmers are subsidized,
>as in Europe, this is inherently unsustainable. I agree that much
>subsidizing of agriculture is goofy, paying farmers to grow too much of what
>doesn't sell, in a sense using farmers to launder taxpayer money to
>subsidize the exporters and large feed lots.
>
>I'd suggest a different framework. Farmers produce not only food and fiber,
>they also produce a variety of other public goods and/or externalized costs.
>Externalized costs are well known in the environmental arena-water
>pollution, for example. Public goods are the flip side-tourism, landscape,
>wildlife habitat, maintenance of biodiversity, frequently better job
>opportunities for young people than are available at fast food outlets. For
>the most part, however, only food and fiber production is rewarded in the
>market. Farms usually generate the same income whether wildlife habitat is
>planted or destroyed.
>
>This is one reason why some European countries subsidize agriculture-to pay
>for the public goods that the market does not reward. It is also why
>regulations are essential-to require that externalized costs be
>internalized. Ultimately the entire tax system should be shifted from
>taxing income to taxing consumption of non-renewables, but that's a long
>time off since we can't even tax gasoline in this country!
>
>Anyway, my point is that public subsidies for public goods are invaluable to
>sustainable agriculture in a market economy. Alpine dairy farmers produce
>some of the best cheese in the world from a grass-based system that draws
>tourists, stimulates rural development, and preserves biodiversity. Without
>subsidies, it would be only trees and occasional play houses for the
>wealthy. So I hope that subsidies don't stay forever a dirty word in ag
>policy discussions.
>
>Hal
>___________
>Hal Hamilton
>Center for Sustainable Systems
>433 Chestnut St., Berea KY 40403
>Phone: (606) 986-5336; Fax: (606) 986-1299
>Hhamilton@centerss.org
>
>
>
>
>
>

______________________________________________
Phil Crawford
Director, Center for Sustaining Agriculture and Natural Resources
Cooperative Extension Program Leader - Agriculture and Natural Resources,
Natural Resource Stewardship, and Food Safety
College of Agriculture and Home Economics
411 Hulbert Hall
Washington State University
Pullman, WA 99164-6230
Voice: 509-335-2885
FAX: 509-335-2926

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