Agricultural Policy

Pre-class Assignment questions for Week 4

Answers due before class on Wednesday, February 5.

A.. The Illogic of Farm Subsidies, and Other Agricultural Truths, NYTimes, Stephen J. Dubner: http://freakonomics.blogs.nytimes.com/2008/07/24/the-illogic-of-farm-subsidies-and-other-agricultural-truths/

A.1  How have government farms subsidies impacted the United States? The world? 

The farms subsidies can be a big burden for U.S. government. It’s a large amount of payment but and the agricultural industry hardly benefits from it.

A.    2  What would be the implications of eliminating subsidies? Consider both American farmers – of all types – and farmers in developing countries (e.g., countries in Africa) – who would benefit or be harmed by ending U.S. farm subsidies?  How?

Subsidies make the price of American products much cheaper then their competitors such as countries in Africa. Ending the subsidies could benefit them.

B.  Q&A: Common Agricultural Policy:  http://news.bbc.co.uk/2/hi/4407792.stm

B.1  Are there “crop subsidy”-type provisions in the CAP? If so, how do they compare to U.S. subsidies?

There is crop subsidy in CAP. Unlike the subsidies in U.S., which goes to ordinary farmers, it only goes to the wealthy landowners and businessmen.

B.2  Is the CAP viewed in the same light as U.S. subsidies?  Does it have the same type of economic impact or effects as U.S. subsidies?

The European countries seems benefit from CAP payments much more than the American agriculture benefit from U.S. subsidies.

C. “The $956 billion farm bill, in one graph”.  The Washington Post, Wonk Blog,, Brad Plumer.

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/28/the-950-billion-farm-bill-in-one-chart/

Find some details in the Washington Post article to answer these questions about the new Farm Bill -- assuming that Congress approves the Farm Bill as described in the Washington Post article (and the House of Representatives already did approve it):

C.1 What changes are being made to government policy for for milk, cheese, and butter prices?

The 70-year-old policy is abandoned and a bill will offer insurance to farmers to protect themselves from unexpected flow in price of milk and feed.

C.2. What changes are being made to the Food Stamp program, officially called the Supplemental Nutrition Assistance Program?

More restrictions will be put on and more money will be cut off.

C.3 Aside from the changes in dairy prices and food stamps, describe at least more “big” changes in agricultural policy if this Farm Bill passes?

A huge amount of money is cut from commodity programs and distributed to other farm aiding programs.