Prospects for Fundamental Change in Farm and Food Programs: Discussion

Abstract

Dobson and Gardner have approached the topic of changes in policy from different points of view. However, they reach somewhat similar conclusions about the possibility of change in U.S. policy. Dobson began with the premise that there are strong forces behind the status quo and concluded that USDA programs will remain highly resistant to In the present political and economic environment, 'fine tuning' of existing legislation . .. seems more likely to occur than fundamental change. Gardner, on the other hand, started with the assumption that there is a need for change in U.S. agricultural policy. He notes that of broad support for change is informal but pervasive. But, in conclusion, he states that substantive change would plausibly be expected were it not for the fortuitous appearance of the greatest incentive for change confronting the federal government in 1985, the prospect of a $150-$200 billion budget deficit in economic upswing. I doubt the administration would agree with his use of the word fortuitous in describing the budget deficit. However, I agree with his observation that budgetary problems will be a force for change in agricultural policy. Dobson developed interesting list of seven factors contributing to the resistance to change in programs. I have no disagreement with his list or with his assessment about the changing strength of these variables in recent years. However, I think there are at least five variables that are contributing pressure for change in agricultural policy. Moreover, the importance of all five of these variables has increased during the past five to ten years. (a) Welfare of families relative to urban families. One is hard pressed to argue that as a group families are economically disadvantaged relative to urban families. In fact, there may be more millionaire farmers than any other working segment of the population. Gardner noted that there is broad support for the conclusion that farm programs should not redistribute income to people whose incomes are above those of the average consumer/taxpayer. Existing programs have been producing this undesirable result. Increased public understanding about the structure of agriculture will sharpen public criticism of this result of programs. (b) Shortage of proof that there are beneficial effects of existing programs. This is the converse of Dobson's second point that there is shortage of evidence about the negative impacts of programs. I suggest that in the future benefit/cost ratios of programs will be a stronger argument in support of change than the lack of damage/cost ratios will provide in support of the status quo. (c) The continued expansion of massive surplus stocks, particularly of dairy products. The maintenance of these stocks is both unnecessary and expensive. The magnitude of these stocks far exceeds anything needed for price stabilization. The magnitude of these surpluses will make it increasingly difficult to justify existing programs. (d) Added interest and activity of new players in the policy game. Livestock producers and agribusiness firms have recognized that programs can have a significant impact on their bottom line and are becoming more active participants in the policy formation process. The impact these new players will have on policy is uncertain. They may stimulate major changes or they may fragment efforts to the point that no changes will occur. (e) Expanded rhetoric by the administration and others that major changes in programs are necessary. The administration at least gives a lot of lip service to the need for Dobson noted that an administration wishing to change legislation in fundamental ways must be willing to veto unacJ. Bruce Bullock is a professor and Chairman, Department of Agricultural Economics, University of Missouri.