Landed Gentry

Farm subsidies and rental rates


A new study published by the National Bureau of Economic Research suggests that American agricultural subsidies hurt farmers in the United States as well as other countries. Based on seven years of data from more than 10,000 farms, economists Barry Goodwin of North Carolina State, Ashok Mishra of Louisiana State, and Francois Ortalo-Magné of the University of Wisconsin find that farm subsidies drive up land prices by $13 to $30 an acre.

The study concludes that "landlords are effective in extracting a large share of payment benefits through higher cash rental rates." The inflated land prices hurt fledgling farmers the most. "If someone's wanting to enter farming and they don't have any assets," Goodwin say, "they're going to pay higher rents because of policies now."