An Urban's Rural View

Before, during and after a farm-bill debate, big-city editorial writers make a big deal of the billions in subsidies Uncle Sam gives farmers. They don't talk much about subsidies in other countries. Statistics (http://tiny.cc/…) from the Organization for Economic Cooperation and Development, a club of 34 developed nations, suggest they might be surprised if they did.

In absolute terms, Asian countries lavish more on their farmers than the rest of the world combined. In 2012 China, a non-OECD member, doled out $165 billion (http://tiny.cc/…), Japan $65 billion. Non-member Indonesia spent almost as much as the U.S., which the OECD's tally put at $30 billion.

The OECD does an even more thought-provoking calculation, showing subsidies as a percentage of farm income. In 2012 farmers in the OECD countries averaged 19% of their income in subsidies. But that average masked a wide range.

In Norway subsidies accounted for 63% of farm income.

In Switzerland, it was 56%.

In Japan, 56%.

Korea, 54%.

In the European Union as a whole, subsidies were much lower -- 19% of farm income. Canada's were 14%.

And the U.S.? Editorial writers, take note. According to the OECD our farmers received only 7% of their income from subsidies.

After recovering from this surprise, the editorialists could conclude that the world is full of sinners and our sins are piddling compared to those of other countries.

More likely, though, they'll deplore any sinning at all. Why shouldn't we strive to be saints? Sainthood, the OECD suggests, is possible. In Australia farm subsidies are but 2.72% of farm income. In New Zealand they're a microscopic 0.79%.

How the pundits look at it might ultimately depend on whether the just-passed farm bill achieves its projected $23 billion in savings over 10 years. As my DTN colleague Chris Clayton reported in his blog the other day (http://tiny.cc/…), there is already a credible study that suggests the assumptions those projections were built on are as wobbly as Jell-O.

Don't be surprised, then, if the editorial drumbeat against farm subsidies continues.

Urban Lehner

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