Will USDA Farm Programs Remain Highly Resistant to Change?

Abstract

Some recent comments by agricultural economists and policy makers can be interpreted as a comprehensive indictment of U.S. Department of Agriculture (USDA) farm programs. Brandow, for example, has concluded that USDA programs retard or alter interregional shifts in cotton and milk production, with significant efficiency losses. Lesher has argued that high price supports have caused substantial losses of export markets for U.S. rice, cotton, and tobacco. Schuh has concluded that USDA commodity programs as we have conventionally understood them have probably outlived their usefulness (p. 73). While noting the contribution of farm program costs to federal budget deficits, David Stockman, Director of the Office of Management and Budget of the Reagan Administration, has asked rhetorically: Why any farm price support program at all? One could go on, but these comments convey the message. Most of the criticisms of USDA farm programs mentioned above are not new. Thus, one is led to ask: If USDA farm programs exhibit numerous shortcomings, why have they survived essentially intact since the 1930s? Have the forces which to date have caused farm programs to resist change gained strength, lost strength, or exhibited no major change in recent years? Answers to these questions--particularly the latter-might throw light on the important issue of whether USDA farm programs (defined for purposes of this inquiry as price support programs and federal marketing orders) will survive largely unchanged for many additional years. This paper addresses these questions with the obj ctive of identifying developments that could force major changes in or a phase-out of USDA farm programs.