By Chris Edwards and Randal O’Toole
The Department of Agriculture provides an array of subsidies for farmers and imposes extensive regulations on agricultural markets. It operates the food stamp and school lunch programs, and it administers numerous subsidy programs for rural parts of the nation. The Forest Service is also within the Department of Agriculture.
The department will spend $148 billion in 2015, or $1,203 for every U.S. household. It operates about 266 subsidy programs and employs 91,000 workers in about 7,000 offices across the country.
- Agricultural Subsidies. The department provides up to $30 billion annually to farmers of corn, cotton, rice, soybeans, wheat, and other crops. It also aids farmers with research, loan, and insurance programs.
- Agricultural Regulations and Trade Barriers. The government regulates domestic markets for products such as sugar and milk, and it imposes trade restrictions on various farm products.
- Rural Subsidies. The department runs numerous subsidy programs for businesses and individuals in rural areas.
- Food Subsidies. Most of the department’s budget goes toward food subsidies, including the food stamp and school lunch programs.
- Forest Service. The Forest Service oversees 193 million acres of forests and provides subsidies to businesses and state governments.
All agricultural and rural subsidies in the Department of Agriculture’s budget should be abolished to save taxpayers more than $30 billion annually. In addition, agricultural trade barriers should be repealed. Current agricultural and rural policies are economically and environmentally damaging, and they create unfair transfers of wealth.
The department’s food subsidy activities—food stamps, school lunches, and WIC—are properly local and private functions. They should be devolved to the states, with each state determining appropriate policies for its own residents. Such reforms would save federal taxpayers about $98 billion annually. Some states may decide to fund food subsidies on their own, but competition between the states would likely result in smaller, more innovative programs.
Forest Service subsidies to state governments and private businesses should be ended. Congress should also explore options to transfer the national forests to the states or to new independent trusts that would be self-funded from forest-related receipts.
The table shows that these reforms would eliminate more than 90 percent of the USDA’s budget, saving federal taxpayers $131 billion annually, or about $1,100 per U.S. household. Under the proposal, the USDA would retain responsibility for animal and plant health inspections, food safety, grain and packing inspections, and conservation activities.
|Department of Agriculture|
|Proposed Spending Cuts|
|Program||Spending in 2010|
|Farm Service Agency||$16,584|
|Risk Management Agency||$7,033|
|Foreign Agricultural Service||$1,604|
|Nat. Inst. of Food and Agriculture||$1,483|
|Agricultural Research Service||$1,369|
|Agricultural Marketing Service||$1,272|
|Agricultural Statistics Service||$162|
|Economic Research Service||$80|
|Food Stamp program (SNAP)||$72,482|
|School Lunch and related programs||$17,307|
|Nutrition program (WIC)||$7,704|
|Rural Housing Service||$1,928|
|Rural Utilities Service||$613|
|Rural Business Coop. Service||$297|
|State and private forestry grants||$515|
|Explore options to restructure forests||n/a|
|Total proposed cuts||$131,255|
|Total department outlays||$142,016|
|Source: Estimated fiscal year outlays from the Budget of the U.S. Government, FY2011.|