Agriculture is one of the most interfered-with industries on earth. Across the world, government subsidies wreak havoc with farm economies. Though we haven't made much progress in eliminating the payments, this concept is increasingly understood by Americans. What's less appreciated is that subsidies also cause environmental problems. By encouraging the cultivation of unneeded marginal land, overuse of scarce environmental resources, and increased use of chemicals, farm subsidies harm the ecosystem as well as consumers and even farmers.
Thanks to U.S. price supports, agricultural economist Del Gardner notes, "land has been cultivated ... that would have remained in rangeland and forests, especially in the southern region and in the semi-arid and arid regions of the Great Plains and Rocky Mountains." "Aided by government farm programs," writes John Hosemann, retired chief economist of the American Farm Bureau, "farmers clearcut and drained large tracts of forestland, particularly in the Mississippi River delta region but also in the mid-Atlantic states." In the Florida Everglades, over half a million acres of swamplands have been converted to sugar fields to take advantage of government subsidies.
Subsidies also lead to increased use of chemical inputs. In a study of six farming states, Jonathan Tolman found that eliminating subsidies would reduce fertilizer use by 29 percent. In the North Carolina coastal plain, elimination of subsidies could reduce water pollution from nitrogen leaching by 46 percent, according to researchers Kathleen Painter and Douglas Young.
Even when subsidies are tailored for supposed environmental benefits, they often end up doing more ecological harm than good. Consider two of the main "Green" endeavors paid for by the U.S. government--ethanol production and the Conservation Reserve Program. Both demonstrate how the unintended consequences of market manipulations can do damage despite the best of intentions.
One of the most egregious agricultural subsidies in the U.S. today underwrites the production of ethanol--a gasoline substitute made from corn. While purporting to help the environment, it actually has the opposite effect.
The ethanol program provides a bonanza for corn-producing states such as Iowa and South Dakota. Powerful senators and Iowa's importance to Presidential nominations have garnered these regions a subsidy equivalent to 54 cents per gallon of ethanol produced. The vast majority of the money goes to one agribusiness: Archer Daniels Midland, which produces 60 percent of the nation's ethanol and receives in excess of $400 million per year from the federal treasury in doing so.
One might overlook these costs if ethanol actually did what its proponents claim (reducing air pollution while providing domestically produced energy). But ethanol is no boon. Cornell researchers David and Marcia Pimentel report that ethanol is actually an environmental nuisance when all aspects of its production are taken into account: "Ethanol produced from corn causes environmental degradation from increased soil erosion and aquifer mining, from soil, water, and air pollution, and from increased emissions of global-warming gases." But according to the General Accounting Office, "little change in air quality or global environmental quality" would rest, It if ethanol subsidies were ended.
The Environmental Protection Agency and the California Air Resources Board made similar claims after conducting studies on a possible exemption for California from 1990 Clean Air Act requirements that oxygenates be added to gasoline in regions that failed to meet the federal air quality standards for smog. (Ethanol had become the only oxygenate choice after groundwater was polluted from use of its lone competitor, MTBE. But other researchers found that ethanol actually increases the evaporation rate of gasoline, which leads to pollutants …