Red meat: to subsidize or not to subsidize?

 We have spent some time theorizing the “why” of regulation. As we saw in class, Stigler’s “Capture Theory” provides an intuitive explanation: claiming that regulation is “acquired by the industry and is designed and operated primarily for it”. This somewhat scary idea, however, is walked back by Peltzman in his “Toward a More General Theory of Regulation”. What is clear from these works is that for-profit industries are incentivized to lobby their respective governments for industry control and/or economic support, but can only attain such if they are agreed to by vote-maximizing representatives.

Thus, a recently published article titled “Nearly all global farm subsidies harm people and planet – UN” especially peaked my interest as a public choice academic. This text lays out how the global climate change threat is being intensified by governments subsizdizing the production of red meat and dairy as well as the need to re-allocate resources towards more eco-friendly agriculture. According to a UN report discussed in the article, a stark 90% of the $540 billion in annual global support provided to farmers does more environmental harm than good. Further, an estimated $12 trillion in damage is done per year with the current level of regulation on a global basis, which greatly favors the environmentally-tolling production of meat and dairy (in terms of subsidies). 

An analysis of the effect this regulation has on total welfare across the impacted markets is necessary to determine the usefulness of these policies; we must consider whether the benefits these subsidized farmers are enjoying outweigh the costs. $12 trillion is no small number, so perhaps total welfare is being decreased as a result of regulation—as theorized by Peltzman. If this is the case, what will it take for these policies to change? And when? The answer lies in the attention the issue (or set of issues that this gets grouped in to) receives among voters and whether it will drive vote-maximizing representatives to alter their legislative course.