On the Economics of US Agricultural Policy

ABSTRACT This paper presents an economic analysis of US agricultural policy, building on a modified version of Gardner's efficient redistribution. We argue that agricultural policy is motivated as an attempt to implement an efficient redistribution scheme that redistributes income toward farmers who, as a group, have been adversely affected by agricultural productivity growth. We show how this approach helps explain why subsidies are more common in agriculture than in other sectors of the economy. We explore how our analysis provides new and useful insights into the design and implementation of US agricultural policy.