Farmgateblog.com - Where farm decision-makers start their day

« Back to main

Friday, January 14, 2011

How Would You Re-prioritize The USDA Budget?  Would Taxpayers Agree?



 

If you could shift the funding in the USDA budget, where would your priorities be?  Farm programs?  Research?  Food assistance programs? Conservation?  Rural development?  Those questions were asked of nearly 1,200 consumers and taxpayers located throughout the US by a team of economists from Oklahoma State University and the Kansas City Federal Reserve Bank.  Their results may be a bit unsettling to farmers who should know that federal funding for agricultural programs will likely diminish in the next Farm Bill.

Farm programs are controversial and anytime the major media want to detail government waste, they will investigate something in agriculture that becomes sensationalized, yet may be well within the bounds of the farm program, or may be the result of some singular illegal activity for which all farmers get blamed. Currently, farm programs are only 20% of the USDA budget, and that includes all payments and crop insurance, with food assistance programs being 60% of the USDA budget.  In themselves, farm programs are technical, as are most USDA programs, and the researchers acknowledge that the average taxpayer is not well informed of agricultural policy.  They say “most taxpayers are sympathetic to the plight of the American farmer.” 

But the researchers point to other documentation that farmers only receive about 50¢ of every $1 of farm subsidy payments, yet for every $1 spent on agricultural research, there is $10 in benefits generated to farmers. “Thus, if the desire is to convey $10 billion in benefits to farmers, the outcome could be achieved either by spending $20 billion on farm support programs or by spending $1 billion on agricultural research. These results show that even if taxpayers are willing to direct their tax dollars to benefit farmers, they might be willing to redistribute money away from farm programs and toward agricultural research.”

The researchers solicited public responses to the importance of the six major USDA budget categories:  farm support, food assistance, food safety and inspection, natural resources and environment, research and education, and rural development.  A follow up question asked how they would distribute $100 across each of those categories.  To assist the understanding, a limited description of the USDA programs was provided.

So what was the result?  50.7% of the 1,196 respondents believe that food safety and inspection to be the most important part of the USDA budget.  Interestingly, food safety and inspection gets only $3.14 out of every $100 spent by USDA.  In second place was food assistance, and 20.2% thought it to be the most important.  Currently food assistance programs receive $60.40 out of each $100 spent by USDA.  Farm support programs, which receive $22.03 of each $100 spent by USDA, were in third place of public importance, but the public only wanted $15.82 spent on farm programs if they were uncertain what they were, and $17.94 if they had been told what farm programs did.

The researchers contend, “the results imply that most respondents are willing to sacrifice farm support to have more food safety and inspection,” and say the public is willing to give up a certain amount of farm support funding to get more food safety funding, as well as more spending for natural resources and environment, research and education, and rural development.  Subsequently, the researchers found that less money should be going to food assistance and farm supports, and more money to the other elements of the USDA budget, such as food safety, conservation, research and rural development.  Additionally, they say that the benefits of research may be a better income transfer mechanism to benefit farmers than increasing farm program supports.

Summary:
While the public may not understand the complexities of the USDA budget, a survey shows taxpayers want less money spent on food assistance and farm programs, and more spent on food safety.  The research also points to the potential for higher funding for agricultural research to be a better means of increasing farm income than through farm programs.

Posted by Stu Ellis on 01/14 at 11:14 PM | Permalink

Post a comment

*Name:

*Email:

Location:

URL:

SPAM? Leave this blank unless you are a spam-bot.

*Comment:

Remember my personal information

Notify me of follow-up comments?

*Required