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Economists Offer Insight for the 2018 US Farm Bill

US agricultural policy is framed in the Farm Bill. The 2018 Farm Bill is currently being debated by policymakers, stakeholders and economists. Provisions of the bill could have a major impact on the farm economy of the United States and its trading partners. To enlighten the debate, the American Enterprise Institute (AEI) in Washington, D.C., is putting forth an extensive analysis of various programs included in the Farm Bill.

NC State economist Barry Goodwin has been leading this AEI farm bill project along with Vince Smith (Montana State), Joe Glauber (IFPRI) and Daniel Sumner (Davis). The project’s team includes Agricultural and Resource Economics faculty members John Beghin, Tom Vukina, and Xiaoyong Zheng. They traveled to Washington, D.C. in March 2017 to present their assessments and analyses at the Agricultural Policy Workshop sponsored by the AEI. Now, their research is being published and disseminated on the AEI website.

Among several analyses, Barry Goodwin’s investigation looks at the cost of agricultural insurance. He explains that farmers only pay for approximately 30% of their insurance which leaves the American taxpayer with the unnecessary burden of the remaining 70%. He goes on to argue in another article that several subsidy and insurance programs, encourages risky and financial unsound behavior. Goodwin also believes that the US agricultural sector is financially stable and should invest more in insurance and rely less on taxpayer-funded subsidies.

John Beghin and Iowa State colleague, Amani Elobeid, review sugar policy, exposing American policies toward sugar production as “a protectionist scheme destined to transfer income to sugar growers and processors” at the expense of consumers and food processors in the order of several billion dollars. The recent agreement with Mexico to constrain sugar imports from Mexico into the US also compromises NAFTA.

For more details on these and other analyses of the farm bill, readers should go to the AEI website.