Continuing Education... Daniel Sumner on the Political Economy of Agriculture
By Amy Willis
This week, Roberts spoke with agriculture & resource economist Daniel Sumner on the history, winners, and losers of U.S. agricultural subsidies from the New Deal to today.
1. Mancur Olsen and Gary Becker argue that small groups have greater political power than larger ones, which seems counter-intuitive, as they would muster less influence (fewer votes and less money). Explain why it would be the case that their political influence would increase. Roberts notes that over recent decades, the agriculture industry has become increasingly concentrated into smaller number but larger firms. To what extent has this borne out Olsen and Becker? What does this suggest about the political power of agriculture going forward?
2. How do crop insurance programs differ from direct payment subsidies, according to Sumner? How do the effects (intended and unintended) of each type of program compare? What was Greg Page’s case for his support of the switch in the 2014 farm bill from the latter to the former. What do you think Sumner would say in response to Page about which is preferable?