Ag Working Group #2 - Types of Subsidies

The history of government support programs for US agriculture has included a number of different types of programs. Subsidies can be understood as a broad range of programs. There are two elements of this set of work. First, should all forms of subsidies be included in potential working options? The CATO Institute, for example, breaks down eight types of subsidy programs: Direct Payments, Marketing Loans, Countercyclical Payments, Conservation Subsidies, Insurance, Disaster Aid, Export Subsidies, and Agricultural Research and Statistics.

Bryan Grayson identifies the second element of this work, “Whether the topic should go beyond subsidies - There is a lot of literature on agricultural tariffs and quotas. The controversy paper discussed these matters but not as in depth as the debate around subsidies.”

Gordon Stables will be coordinating this work.


Update: We have additional materials from Sean Lowry and Gordon Stables on these questions.

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  • 5/21/2008 12:36 PM David Cram Helwich wrote:
    After recovering from AC's crushing defeat, the Gophers have been hitting the library, and I have had a couple of exchanges with some faculty members in our Ag school (so big they get their own campus , plus the farmers and 'real world policy makers' in my extended family.

    The preliminary (tentative, early, based on two weeks of work) consensus on our squad is that we would strongly prefer that a broader topic option be at least included on the ballot--something akin to rez #1 in the original Vandy topic paper.

    Our primary concern is the affirmative's ability to access large internal links to the impact questions surrounding agriculture policy--Doha good/bad, high-yield ag good/bad, trade credibility, relations, etc. We are not yet convinced that a topic that focuses more narrowly on subsidies can access those--it obviously is a literature question, and the best cards we have found so far talk about systems of government support/intervention in general. We think the ag topic can be very good, but only if it allows us to debate the 'big questions' about U.S. agriculture policy.

    The challenge, obviously, is to create a verb stem that facilities an aff choice to make macro changes (decreases) in government support of ag policy without leaving the door open to too many boutique affs. As we do research, we will be sure to share any terms of art/limiting options that we come across.

    If our concerns about aff advantage access are unfounded, or it is impossible to impose a meaningful limit, then people can vote against a broader resolution. However, it makes sense to put it on the ballot.

    best,

    dch
    umn
    Reply to this
  • 5/21/2008 1:11 PM Gordon Stables wrote:
    Dave -
    Thanks. There is certainly an interest in our part to have a range of options appear on the ballot. Your perspective makes a lot of sense. The basic wording used in the controversy paper is still very much under consideration.

    Please feel to free to share any research that helps to support this perspective or supports specific wordings as we approach the final ballot.

    Gordon
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  • 5/26/2008 8:30 PM Justin wrote:
    Dave makes an intersting point and I agree with his statement that we need to make sure the affirmative can access the large impacts he isolates. However, focusing on subsidies, assuming they are for rice, corn, soybeans, wheat, and cotton still allows access to those impacts. I haven't looked at all of the commodities, but I have found evidence that suggests an elimination of subsidies for the above crops would allow access to Doha good/bad, trade cred, high yield good/bad, relations based advantages.

    A topic that stated the USFG should eliminate all subsidies for one or more of the follwing: rice, corn, cotton, soybeans, and wheat would allow for predictable affs while encouraging good case debate and a ton of different advantages.

    Each of these crops has good solvency evidence and has advantages that are specific to the crop. If you can only find broad elimination of all crops solves the advantage that you want to run then you can eliminate subsidies to all five crops or a combination of two or more crops.

    The challenge for the topic committee will be how to handle the trade issue which I have discussed in a couple of other posts. This was not discussed in as much detail as subsidies in the topic paper. However, the solvency cards really do say that trade restrictions and subsidies are the problem for a lot of these crops.

    How about, The USFG should eliminate all subsidies and/or trade restrictions for one or more of the following: Rice, cotton, corn, wheat, soybeans, concentrated animal feeding operations, dairy, and ethanol.

    Obviously this has problems....
    trade restrictions is probably not the best term, Animal feeding operations, and ethanol problably need to be reworded, and "all" as a modifier for trade restrictions could be nearly impossible to defend in a topical way. I really only want two things from the topic meeting...Resolutions that allow for affirmative to eliminate one of the big five crops and a resolution that allows the option to include trade restrictions in addition to subsidies.
    Reply to this
    1. 5/30/2008 6:05 AM David Cram Helwich wrote:
      Elegance is good, simplicity is good, but...

      There are a large number of government subsidies that promote agriculture production. A few of those (such as price supports) are commodity-specific. Those are readily dealt with/accessed with Justin's proposed resolution. The problem is that there are many subsidy programs (water/irrigation, conservation, insurance to name a few) that _indirectly_ but also _substantially_ encourage the production of the commodity crops under consideration. I think that Justin's resolution is only workable if it focuses on price support subsidies (of the various kinds).

      Consider--my mother owns and operates a large 'family' farm in Idaho, one that produces winter wheat on about 15% of its total acreage. Because she is on the Milner Dam tract, she receives an indirect but LARGE subsidies for water (dams are expensive, she does not bear the total cost), conservation (installation of advanced irrigation systems), and subsidized crop insurance. NONE of those subsidies are commodity-specific, meaning she receives them irrespective of how much winter wheat she grows. If one uses the wand of fiat to eliminate (substantially, all or nearly all, etc) my mother's subsidies, how does one account for the water, conservation, and insurance subsidies? Do you look at my mother's farm's historic wheat acreage? Do you project future likely wheat acreage? Or do you ignore it and focus only on price supports? What if my mother gets out of the wheat business entirely--does she get her indirect subsidies back for the land she shifts from wheat to, say, alfalfa? There is no good answer to these questions.

      Although one may find 'cards' on the various Cato websites talking about the impact of 'crop specific price supports' on various agri-culture choices (monocrop, tilling styles, high yield v. orgo) and trade policy, the indirect subsidies discussed above matter a very great deal in how we farm, where we farm, and to our trading partners. There are plenty of debates to be had about the merits of direct price supports, but they are only a _small_ subset of larger debates about how the government subsidizes agriculture--recall how many cards you see from industry supporters discussing how tiny price supports are in the sum of the Farm Bill. Going back to the family farm example, my mother's choice to use high-yield ag farming techniques has _far_ more to do with cheap water and irrigation equipment than it does with the small, occasional wheat-specific payments she may receive, and this is true for most farmers.

      Another, related concern is that a crop-specific subsidy focus can become a solvency spoiler --I have already found cards, and know that many were read on the Europe resolution, claiming that eliminating direct subsidies would only lead to a backdoor increase in indirect supports.

      This is why I think that something along the lines of resolution #1, that uses a GATT/WTO term of art for support/subsidy, should at least be an option
      Reply to this
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