Small is beautiful?

Matt Yglesias asks a fair question of Mark Bittman’s food manifesto, specifically his proposal that we shift subsidies away from big agribusiness and toward “small” farmers:

It seems to me that what we want from our farms is farms that are as efficient as possible in their use of resources like land, labor, water, etc. You don’t want to encourage a kind of narrow economic efficiency that simply reflects environmental destruction. And of course if a smaller farm can produce a better product, that’s excellent for them and they should find a market niche on that basis. But there’s no more reason for public policy to put its thumb on the scale of smallness than to put its thumb on the scale in favor of corn. Personally, I like going to the farmer’s market when the weather’s nice and so do a lot of other people. In the more prosperous America of tomorrow, I bet even more people will enjoy paying a small premium for the premium wares available at such markets. And if we ever managed to curtail subsidies to agribusiness corn and soy producers, I bet those farmers would be in even better shape. But what’s the case for smallness as such supposed to be?

I think that’s a legitimate point. It’s worth adding that it’s uncertain whether small farms can produce enough food to to feed the entire country. The bucolic image of small, local farming may not be a realistic model for a country the size of the U.S. Plus, it’s not clear that there’s anything inherently wrong with economies of scale.

What we should want, at a minimum, is a kind of level playing field. The problems with our current policy are (at least) two-fold: there are the direct subsidies that government hands out to agriculture (currently about $20 billion a year, largely to big producers of monocrops, including animal feed), and then there are the indirect subsidies in the form of not requiring agribusiness to pay all the costs of doing business, but rather imposing them on third parties. These include, but are not limited to, the environmental, animal-welfare, and health effects of its process and products. If direct subsidies were ended and strict anti-pollution, animal-welfare, and other regulations were enacted and enforced, we’d have something much closer to fair competition between large and small farms. In such a scenario it’s not clear to me that the government needs to be in the business of favoring small farms per se.

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