When Supreme Court Justice Elena Kagan recently referred to the Agricultural Marketing Agreement Act of 1937 as "the world's most outdated law" (U.S. Supreme Court, Oral Argument transcript, March 29, 2013), she could just as well have been referring to the whole convoluted array of U.S. farm programs that have their origins shrouded in New Deal history.
The "dairy cliff" over which milk consumers were left dangling on December 31, 2012 was just the latest peril on the absurd farm policy path that farmers, consumers and taxpayers on which have been wandering for decades. Years ago, the rationale for the "wool and mohair subsidy" was to assure we could have wool combat uniforms for Vietnam. Today, we provide crop insurance for export and biofuels crops like corn, soybeans and even cotton--all in the name of food security.
In fact, for generations no one has been able to maintain any plausible economic reason to support prices, subsidize business insurance, or distribute government payments, mainly to farmers of grains, oilseeds and cotton, while perpetuating convoluted regulations for milk marketing and trade barriers to subsidize sugar producers. Rationales that might have sounded credible in 1950 - e.g.: farmers tend to be poor; the free market just doesn't work - were shown over the decades to be weak rationalizations for transfers to the wealthy. Other stories, such as that farm subsidies aid rural economies, are similarly at odds with basic facts. Farms account for a tiny share of rural employment, and subsidies do not go to poor regions. Where rural poverty is an issue, a direct approach is far better than hoping for a trickle down through farm subsidies.