Sunday, October 14, 2012

The failed farm bill


According to this article in Reuters, the farm bill expired on October 1. It provided agricultural subsidies and crop insurance against many natural disasters (like this past summer’s drought) for many farmers.  While the farm bill passed the Democrat-controlled Senate, the Republicans could not gather enough votes in the House to pass the bill.  Democrats in rural districts are using the (lack of a) farm bill to their political advantage.  In a small, rural, conservative district in Iowa, Christie Vilsack (D) is running against incumbent Steve King (R), and is using the farm bill stalemate as a way to win over traditionally conservative farmers.  According to the article, however, she is running into some trouble:
“The district is not as conservative as Steve King is used to and not as moderate as Christie Vilsack would like," Iowa State's [Professor] Schmidt said.
The analysis brings up two important topics in public choice.  First, since the vote on the farm bill does not require unanimity, farm subsidies are examples of redistribution as takings.  The state involuntarily takes money from the American taxpayer and redistributes it (disproportionately) to farmers, with the hope of driving food prices down.  With redistribution as takings, the utility functions of the beneficiaries are functions of their income and the value of the subsidy/the net benefits of lobbying or using other political resources.  Some of the political resources employed can take the form of favors, and it is no secret that Iowa, a major beneficiary of farm subsidies, is the first state to vote in the primary season.  Second, the right-leaning conservative district featured in the article raises some interesting points on the median voter.  Before the redistricting, Representative King could easily win reelection without a political realignment, since the distribution was skewed and the median voter was far more conservative than the median in the national election.  After redistricting, however, the district has become less secure for King, as he lost some of the rural population.  In order to win reelection, he is forced to move more to the middle.

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