However, the practice of subsidies today no longer functions in a manner that most of us would understand or support. Oddly enough, the very people that most people think a subsidy would support tend to be the very people who are in favor of a complete overhaul of the system - the small, family farmer.
Michael Pollan's recent book Omnivore's Dilemma outlines the history of farm subsidies quite succinctly. Subsidies were part of FDR's New Deal plan to help turn around The Great Depression. Farmers could take a loan against their corn crop, and then either repay the government the loan, or sell the government the corn crop directly, to be put into a grain reserve. This program not only created a grain reserve against times of need, but also sought prevent overproduction, huge variances in the annual price of corn, and all of the environmental problems associated with overproduction.
This system functioned until the 1970's, when the Nixon administration started a chain reaction by agreeing to sell most of the US's corn surplus to Russia. Crop prices locally were temporarily boosted by the sell, but poor weather that year created a similar need for corn in the US, and corn prices were at an all time high, producing a reverberating effect all the way up the food chain. In fact, my parents remember the recession of 1975, and while they tried to blame it on my birth, it can really be linked back to the selling of our corn surplus in 1972, long before I was a twinkle in my parents' eye.
Nixon's administration blamed the lack of food and the high food prices on the farmers Simultaneously, they began to dismantle the federal grain reserve, the government grain purchases and discontinued the loan programs. Instead, they began paying farm subsidies directly to farmers, encouraging farmers to sell their corn at any price, creating a laissez-faire type of business practice in agriculture. Most farmers found they could not stay in business unless they consolidated, or planted more and more each year. The result is that each year now, farmers have maximized production on almost every acre, ceasing to diversify their crops, and can typically no longer support the typical "farm" family on a farm income alone.
Now, proposed farm bill changes could be the great turning point that the first government subsidies were in the '30s, or they could bring similar disastrous results as they did in the '70s. Reviewing some different sources reveals clearly who is for big business and who is interested in creating a more sustainable agriculture future.
I found it shocking that a cooperative extension economist, Robert Goodman of Alabama, could recommend the continuance of the current farm subsidy practices because doing so could risk "stability and farm security", as well as the suggestion that somehow changes would affect consumers negatively, the very ones who pay for the subsidies through taxes, will somehow benefit from keeping costs lower and avoiding consequences of "rocking the boat". He concludes that the past success of the farm subsidies should be taken into account, yet he fails to review or critique the various changes which have taken place to farm subsides over the last 70 years.
Chris Edwards has a far more interesting analysis of the current practices of farm subsidies. It addresses the environmental consequences of over production, how it hurts consumer prices, that most small farmers get very little in the way of subsidy money, and that most of it in fact goes to large scale agribusinesses, and so on.
The best debate I heard was from NPR, on their Science Friday segment of Talk of the Nation, in which they debate whether the Farm Bill of 2007 should actually be called the Food Bill, in that most of the ingredients in the "unhealthy" foods, like a Twinkie, are subsidized, but wholesome foods like carrots, cost more than the Twinkie.
Finally, I think it's very revealing to look at a list of agencies who are dedicated to farm subsidy reforms on the Farm Bill: Public Health Action on the Farm Bill, National Campaign for Sustainable Agriculture, National Family Farm Coalition, Slow Food USA, Community Alliance for Family Farmers, Institute for Agriculture and Trade Policy, Community Food Security Coaliton, just to name a few! Not one big business or Bush Administration special interest group in the bunch!