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Why Does the Govt. Pay Farmers to Not Grow Crops?

Editor's Note: Robert Frank, who recently guest-blogged for several weeks here at the Business Desk with answers to some of life's economic ironies, once again answers questions posed by viewers.

Question: Why does the government pay farmers not to grow crops?

Robert Frank: Paying farmers not to grow crops was a substitute for agricultural price support programs designed to ensure that farmers could always sell their crops for enough to support themselves. The price support program meant that farmers had to incur the expense of plowing their fields, fertilizing, irrigating, spraying, and harvesting them, and then selling their crops to the government, which stored them in silos until they either rotted or were consumed by rodents. It was much cheaper just to pay farmers not to grow the crops in the first place.

Of course, paying people not to do work is bound to be politically awkward (think of the old New Yorker cartoon of an accordion player on a subway platform with a sign next to his cup that read, "Will not play Lady of Spain, 25 cents"). So the government described the program as an environmental one rather than an income maintenance scheme. As described to the public, it was compensation to farmers for retiring acreage to reduce fertilizer and pesticide runoff into the nation's water supply.

-- Posted August 4, 2009 | Comments (0) | Permalink