The High Cost Of Food

There's been a deluge of news pieces about the rising price of food lately. The other day I saw an article about the national pizza chains' woes due to huge increases in the cost of cheese and flour. Then I saw a piece about how a drought in Australia was causing riots in Asia because there was less Australian rice to go around.

On the home front, fuel costs and ethanol subsidies are reducing the supply of wheat and corn for food production, increasing the price of foods that include those crops.

I'm not an economist; but, some brief internet research surfing led me to two federal programs that are idiotic in the face of the rising prices.

Back in the nineties, the Republican Revolution in Congress "reformed" the federal farm subsidy program. Instead of price supports, they transitioned to a "free market" program (with a seven year duration - you know how that turned out) that would pay farmers a base subsidy and allow them to do whatever they thought best with their land, as long as they didn't develop it. Texas had about 600,000 acres planted in rice at some point prior to the change. Texas now has something just north of 200,000 acres planted in rice. What happened to the rest? Landowners realized that they could make more money by kicking the tenant rice farmers off their land and grazing cattle, growing trees for timber, etc. One enterprising owner bought 75 acres of former rice farm and subdivided it into large home tracts. He marketed it in part by telling prospective buyers that they could put a house on one acre and get a couple of thousand bucks a year from the feds for "not growing rice" on the other 9 acres.

Then there's the federal "conservation" subsidy. Started as a way to protect land from erosion, it is now a program that pays about $2 billion a year to land owners to not farm 34 to 40 million acres (the sources varied, one described the area as the size of the state of New York).

A few billion dollars is chump change when it comes to federal spending. But, tens of millions of acres of diverted farm land is not chump acreage when it comes to food production. Stopping these subsidy programs won't in the near term, or probably in the long term, result in all of those acres returning to farm use; but, some will. In the meantime why pay money to people to do the opposite of what is in the national interest?