Farmers Need Free Markets, Not Tariffs and Welfare
The more important the product—and food certainly ranks high on any list—the better it is to allow markets to work.
If you want to, say, make juice from an orange, the typical way is to mash the orange on a simple squeezer. But the early-to-mid 20th-century cartoonist, Rube Goldberg, had an even better way. His "simple" juice-making contraption involved pulling a string, which releases a guillotine blade, which cuts a cord that engages a battering ram that then enrages a sleeping octopus, which attacks the dangling orange and squeezes out its juice.
Goldberg's bizarre cartoon machines were hilarious and have for decades inspired students to create their own real-world variety. One website notes that dictionaries in 1931 turned his name into an adjective that means "accomplishing by complex means what seemingly could be done simply." I've always enjoyed perusing them because they remind me of the world's unnecessarily complicated systems—and see them as analogous to how our governments operate.
Let's take the issue of farming. The simplest way to provide food for the population is to, you know, let farmers grow what they want to grow, sell their products to whomever they choose, export them in response to demand, and so forth. The more important the product—and food certainly ranks high on any list—the better it is to allow markets to work. Instead, our government micromanages the situation with complex regulations and subsidies that distort the market, raise prices, and pick winners and losers.
Farm policy has been a mess for decades, with both parties to blame. Every politician (and voter) loves farmers, who are perfect fodder for gauzy backdrops of real Americans nurturing the land, flying the flag, and epitomizing everything good and wholesome about the nation. The early Iowa caucuses reinforce this dynamic. Farming is a tough and risky business, but it is, in fact, mostly a business. Creating a mythology about it only makes it harder for lawmakers to address farm policy in a sensible manner that benefits everyone.
Farming has been in the news lately, as the Trump administration talks incessantly about imposing massive new tariffs on agricultural products. It's also intent on deporting a large portion of those farms' labor pool. Last month, Trump assured farmers that he would protect them from any negative effects of his on-again, off-again trade war with China—not a surprise given federal taxpayers typically provide massive subsidies to farmers.
"The Trump administration provided more taxpayer dollars to farmers financially damaged by the administration's trade policies than the federal government spends each year building ships for the Navy or maintaining America's nuclear arsenal," according to a 2020 study from the National Foundation for American Policy. "The amount of money raises questions about the strategy of imposing tariffs and permitting the use of taxpayer money to shield policymakers from the consequences of their actions."
What a crazy policy contraption. Basically, the feds impose damaging new taxes and trade restrictions on farmers for reasons mostly related to ideology and rent-seeking, then undo their effects by making farmers more dependent on government largesse. Often lost in the discussion, but one reason that U.S. farmers are so dependent on selling commodity crops to China and elsewhere is that past policies essentially subsidized them to do so.
Like with all things political, various federal farm policies have created a series of odd bedfellows. Many environmental groups have lauded past farm bills because they provide incentives for farmers to set aside land as open space, but overall the federal meddling has harmed the environment. For instance, federal sugar subsidies have greatly diminished the Florida Everglades by encouraging the conversion of wetlands into sugar fields.
As is typical, federal subsidies end up benefiting the biggest players. Overall farm incomes remain above average, but politically savvy agriculture lobbies cry poormouth to boost their handouts. In 2023, market-oriented groups opposed congressional efforts to boost those subsidies by noting: "Increasing price guarantees for covered commodities would only boost federal payments to the largest and most successful farmers, who already received almost 66 percent of all commodity subsidies in 2021."
All these policies drive up food prices for non-farmers and reduce our choices in meats and produce. As Chris Edwards of the Cato Institute explained in 2022, if the feds deregulated, "Different crops would be planted, land usage would change, and some farm businesses would contract while others would expand. But a stronger and more innovative industry would emerge that had greater resilience to market fluctuations. Private insurance, other financial tools, and diversification would help cover risks, as they do in other industries."
Instead of creating this convoluted, counterproductive policy that mimics a Rube Goldberg farce, the government should do the basics to help farmers. It should scuttle tariffs, halt subsidies, eliminate costly shipping levies, create a guest-worker program so farmers can have a consistent labor source, lower taxes, bolster water infrastructure and let markets do the rest. There's no reason to use an octopus to make orange juice.
This column was first published in The Orange County Register.
