Acton Institute Powerblog

The government funds U.S. farmers – and their competitors

When government becomes sufficiently large, its impact on private citizens is not just harmful; it’s self-contradictory. U.S. policy toward dairy farmers offers a poignant example.

Joseph Sunde recently explored one aspect of U.S. agricultural policy: The Food and Agriculture Act of 1977, signed by new President Jimmy Carter, intended to artificially raised the price for dairy products (and led to a 500-million-pound stockpile of “government cheese”).

Government intervention in the market, which inevitably confuses price signals, forced U.S. consumers to pay higher prices. At least on paper, that benefits U.S. dairy farmers.

But what the government gives with one hand, it removes with the other. The federal government spent $22 million provided by U.S. taxpayers – including dairy farmers – to benefit the Serbian cheese industry. USAID explained its role is to help dairy farmers in Sjenica, Serbia improve “cheese standards and quality” to market its product “to the consumers in the EU, US, and further.”

Senator Rand Paul noted in his “Waste Report” for Fall 2019:

In recent years on the domestic side, the U.S. has been experiencing a massive, historic cheese surplus, one that would eventually hit 1.4 billion pounds—which NPR noted in its report “means that there is enough cheese sitting in cold storage to wrap around the U.S. Capitol.”

So American dairy farmers dealing with the realities of this situation might be cheesed off to learn their government worked to strengthen competition and the European cheese market—using their own tax dollars to boot! (Emphases in original.)

The towering Christian intellect Dr. Samuel Johnson once wrote, “All power of fancy over reason is a degree of insanity.” What would he say of a government that works at cross-purposes with itself?

(Photo credit: Hallaway Dairy Farm in Delhi, New York. U.S. Dept. of Agriculture. Public domain.)

Rev. Ben Johnson

Rev. Ben Johnson is Executive Editor of the Acton Institute's flagship journal Religion & Liberty and edits its transatlantic website.