Surprise, surprise. Farmers can do better without federal government subsidies, price supports, quota systems, and other Depression-era programs that constrain competition and expansion. Today, the Wall Street Journal focused a front-page article (subscription required) on the success of today’s tobacco farmers, who were “bought out” from those programs three years ago. Now some tobacco farmers are finding that they can make more money when they’re allowed to compete in the market.
Nationwide, the tobacco crop has been rebounding. Today there are 355,000 acres under cultivation — still down from the 408,000 acres in 2004, but on the rise. Some farmers reinvested their buyout cash in their tobacco operations. In big tobacco-producing states such as Kentucky, and in smaller ones like Wisconsin and Pennsylvania, many tobacco farmers are enjoying renewed prosperity. Tobacco production in Pennsylvania has more than doubled since 2004. In Illinois, production has gone from practically none to at least 1,000 acres.
Maybe Congress will catch on that farmers can actually do better without federal farm subsidies — but don’t count on it, if the bloated-with-subsidies 2007 Farm Bill crafted by the House is any indication.
The WSJ expressed some hope, though, that the tobacco experience may provide some traction for reform:
Many farmers say that without the system of subsidies for commodities like corn, cotton and soybeans, they’d be at risk of going under. But critics say the system fosters inefficiency, distorts international trade and supports mainly the wealthiest farmers. Now these critics can point to tobacco as evidence that subsidies are unnecessary.
With only 1.9 percent of the U.S. population employed in the agriculture sector today, compared to 21.5 percent in 1930, farmers still persist in lining up for government handouts, even when it’s not in their best long-term interests. And with 75 years on the dole for many farmers, they’re a tough special interest group to crack.