The College of Liberal Arts Talks Farm Subsidies with Dennis Jansen

Nov 23, 2021
Summary: Almost a century after the Great Depression hit the U.S., we are still paying farmers and ranchers farm subsidies. In an article that was published on November 3, 2021, Dennis Jansen spoke to Tiarra Drisker, student reporter for the College of Liberal Arts, on how farm subsidies are actually a form of crony capitalism.

“I would say that in many ways the name ‘crony capitalism’ is another term for special interest legislation and regulation that benefits businesses both corporations and proprietorships,” Jansen said.
However, these benefits are accrued at the cost of the taxpayer. “The farm subsidies are inefficient from an economic viewpoint,” Jansen said. “Take peanuts for example. We guarantee a price for peanuts that almost always exceeds the market price. This means we have to tax everyone to pay farmers a subsidy over and above what their peanuts earn in the market. Then this guaranteed high price leads to farmers growing even more peanuts than they would grow at the lower market price, and every one of those additional peanuts receives the same price guarantee.”

“Farm subsidies are concentrated among a small number of farmers,” Jansen explained. “Meanwhile the cost of these subsidies are spread out among a very large number of non-farmers. Farmers have a large incentive to spend time and money to influence legislation that protects or maintains their subsidies. Meanwhile non-farmers have much lower incentives to spend time and money to influence legislation reducing or eliminating these subsidies.”

The full article can be found here.

Read the accompanying blog post here.