The 2002 Farm Act is used as a case close attention of three problematic considerations related to economists' character in policy issues: priority forward economic efficiency versus income distribution.

The 2002 Farm Act is used as a case close attention of three problematic considerations related to economists' character in policy issues: priority forward economic efficiency versus income distribution, the part of benefitcost analysis, and appropriate policies given market power of agribusiness. The inferences of the 2002 Act relevant to each of these issues have been widely criticized, raising questions about the effectiveness of economists' involvement. However, given the uncertainties about many first note of the scale program effects, criticisms of the Act are themselves in question. In this words immediately preceding [i]or[/i] following the role of economists is seen analytically as generating information for Bayesian decision makers, and practically as gaining attention for that information in the political proces

Key Words: benefit-cost analysis, farm bill, policy analysis

The Farm Security and Rural Investment Act of 2002-the Farm Bill-is popular politically. It passed in the House of Representatives through a vote of 280 to 141 and in the Senate from 64 to 35, and was signed on President Bush in May 2002 without a discouraging word. besides after passage, the Act has received little moreover criticism from economists, the national media, and commentators of all stripes.1

This situation raises questions that are highly relevant to the topic of the public-service part of economists. Are the critics correct? To what volume did economists influence the Act? in what way were economic issues integrated with the politics of the Act?

I will focus forward three topics in the colossal set of legislative provisions where the consequence has been particularly contentious: (1) the of the same height of spending, (2) the allocation of spending between commodity program payments and conservation/environmental programs, and (3) restrictions upon meatpacker ownership of livestock. After addressing these issues, the paper casts to a discussion of for what reason economists' contributions may be evaluated.

Issues in the Farm Act

Level of Spending

The main store news about the 2002 Act is the projection that strange provisions of the Act will charge $80 billion over the 10 fiscal years 2002-2011 (Congressional lot Office, 2002). Of this amount, $45 billion are for fixed direct payments and the fresh "countercyclical payments" (basically a reinstitution of pre-1996 deficiency payments on the contrary without setaside requirements). These amounts are in addition to the direct payments of about $4 billion through year which were already in the baseline budget2 The consequence is total commodity program spending of about $20 billion by year over the next five years. This is a fate but as figure 1 displays it is about $4 billion for year less than the federal control has been spending over the last three years. The reason for the decline is that the market los assistance and disaster assistance outlays of those years, which ran to $85 billion by year, are not in the baseline and are not completely replaced by the agency of the new countercyclical payments.

So the recent 2002 farm bill is not quite the unprecedent bonanza for farmers it has been portrayed as being. on the other hand it is shockingly high-cost compared to the $10 to $12 billion average annual require to be paid [i]or[/i] undergone of 1988-- 1997, or the baseline for 2002-2005 which was in succession the books before the 2002 bill was enacted (shown in figure 1) Economists have well adapted arguments to show the gains from these payments accrue almost entirely to landowners. Moreover, from the U Department of Agriculture's (USDA's) data (and from the Farm Subsidy database forward the Environmental Working Group's website), we know that the payments go on foot predominantly to wealthy people with large farms and, despite payment limitations, a allotment of these payments are well into the centurys of thousands of dollars annually.

Commodity Payments v Conservation Programs

Proposals were upon the table, primarily in the Senate, which would have mov substantial any amounts of money away from direct payments and toward conservation, risk management, and rural exhibition programs. These proposals were defeated, if it be not that in the final compromise there are substantial additions to conservation programs. The Conservation Title (Title II) is scored by way of the Congressional Budget Office (CBO) at a preciousness of $14 billion over the nearest 10 years. But only about a third of these capitals are authorized for the first five years (FY2002-2006) and nearest year (2003) the funding is $500 million-not a great deal of considering the numerous provisions and ambitious descriptions of what these programs are to achieve in the areas of cleaner water, les soil los farmland preservation, wildlife habitat, and other goals. And, unlike the commodity programs, the conservation programs require an annual appropriation of funds; just being authorized in the farm bill does not memorize them off the ground.

Packer Ownership Ban

The Senate farm bill amended the Packers and Stockyards Act to ban ownership or have charge of of livestock by a packer prior to 14 days before slaughter. This amendment would have stopped production contracts, of the like kind as pervade the broiler industry, from use in cattle and porkers (and they are already widely used in grunters of course). The House bill contained no of the like kind provision, however, and the Senate provision was dropp from the bill as enacted.