Agribusiness Political Donations and Farm Bill Votes

Agribusiness Political Donations and Farm Bill Votes

Matthew Mitchell | Mar 26, 2014

When governments dispense privileges such as insurance subsidies, price supports, or protection from foreign competition, they create incentives for firms to invest large sums of money in obtaining and maintaining these privileges, as the farm bill demonstrates. 

This week’s chart shows the average aggregate contributions that members of Congress received from agribusiness PACs in each of the last three quarters of 2013. The data are separated by members’ votes on the final bill.  

Members who voted for the bill drew in substantially more political contributions from various agricultural interest groups than those who voted against it, receiving nearly three times as much throughout the period analyzed. Political contributions from these groups spiked in the second quarter, when several key votes were cast in both chambers. 

The fact that members who ultimately voted for the bill received so much more than those who opposed it may indicate that interest groups prefer to donate to members who are likely to support their issue. This is known as the “political man” theory of interest group behavior. On the other hand, the pattern of giving may indicate that political donations actually affect the final votes that members cast. This is known as the “economic man” theory of interest group behavior. Economists and political scientists have studied these questions extensively, and the balance of evidence suggests that there is some truth to both theories: interest groups do tend to give to candidates that already agree with them, but they also give to candidates in order to sway their votes.

The final farm bill is expected to cost taxpayers $956 billion over ten years, but the economic costs will be much larger. These costs include not just the explicit taxpayer subsidy and the money wasted in seeking these privileges but also the higher prices that consumers will pay for some food and the resulting misallocation of capital.

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