Grain Drain: The Hidden Cost of U.S. Rice Subsidies

Abstract

Rice is the world's most important food commodity and also the most protected and subsidized. The U.S. rice program is no exception. The U.S. government supports domestic rice production through tariffs on imported rice and direct taxpayer subsidies based on production, prices, and historical acreage. These subsidies result in enormous welfare losses for both U.S. consumers and taxpayers. U.S. farm policy should embrace a more market-oriented rice program in the upcoming 2007 farm bill, including repeal of tariffs and a rapid phaseout of subsidies.

Keywords: Cato, Dan Griswold, TBP 25, subsidies, rice subsidies, United States rice program, domestic rice production, tariffs, production, prices, historical acreage, welfare losses, United States farm policy, 2007 farm bill, phasing out farm subsidies

JEL Classification: D11, D12, D24, D30, D43, D49, E31, E61, E62, G18