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Agricultural Programs
The federal government distorts and destroys information by trying
to transfer wealth from consumers to American farmers through a
variety of programs, such as guaranteeing farmers higher prices for

certain crops, subsidizing water for agricultural use, and limiting the
acreage that farmers can legally cultivate. These policies all waste
resources by censoring the communication of information.

Consider cotton farming. Because of federal water subsidies and
price supports, thousands of acres of land in the deserts of Arizona and
California are being used to grow cotton. This clearly would not be
happening if farm programs were not censoring the communication of

valuable information through market prices. The water subsidies
communicate to cotton farmers that the water they are using to grow
cotton has little value in alternative uses. This erroneous information

would be quickly corrected and cotton farms in the desert would
disappear if farmers were allowed to sell their subsidized water to
domestic and industrial users, but such sales are either outlawed or

severely restricted. Even if the water subsidies were significantly
reduced, government price support for cotton would censor
communication to consumers that cotton can be grown more cheaply in

places like the Mississippi Delta and other parts of the South, than in the
desert. Without this censorship cotton production would be shifted out
of the desert and to those areas where production costs are lowest.
Because of the distorted information caused by agricultural

policies, those policies do far less to transfer wealth to farmers than
politicians claim. Because of the artificially high prices farmers receive
for their crops, the price of farm land is bid up as farmers make

investment decisions in land that would make no sense if accurate
information on the value of alternative uses for that land were being
communicated. Farmers who buy land after the farm programs are
established pay prices that result in them making no more than a normal

return on their investments. But even though farm programs do not
increase the wealth of these farmers, eliminating the programs would
reduce it by causing the price of their land to fall below what they paid

for it. And the more these programs have censored and distorted price
information, the greater the wealth loss farmers would suffer if the
programs were eliminated. Therefore, increasing the accuracy of the

information being communicated by agricultural prices and reducing the