Why Farm Subsidies May be on the Chopping Block


The way I see it, nothing is more important than food. So I can understand why President Franklin D. Roosevelt introduced government subsidies to farmers back in the 1930s. Like so many government policies that are around today, it was supposed to be a temporary measure. The objective was to bail out American farm families who were in dire distress at the time.

But that was then and this is now.

And now the dwindling number of families still operating farms in America are not in dire distress. Indeed, they’re doing better than most in these hard times.

Furthermore, over the years big business has swallowed up American farms. Global corporations own most of the agricultural operations in this country today.

The result is that American taxpayers are subsidizing millionaires and billionaires – many of them living in such faraway places as Saudi Arabia.

Here’s what one group that analyzed farm subsidies reported:

Despite the fact that farm households are doing as well or better than others, the federal government targeted some of those households for billions of dollars in government payments. In 2008, that total amounted to more than $12 billion, according to the US Department of Agriculture’s Economic Research Service. (That’s slightly more than the total computed by EWG, not including crop insurance subsidies.) These payments went to only 39 percent of all farms, and the average payment was $11,922.

The skewed distribution of subsidy payments is even more striking when you compare the amount of subsidies received to the household income of the farming operations receiving them. The average household income of farms that received $30,000 or more in government payments was above $210,000 in 2008, more than three times the average U.S. household income that year. Farming operations that received between $10,000 and $29,999 in subsidies earned $110,368 in total household income, 61 percent more than the U.S. mean household income. And the household income of farms that got between $1,000 and $9,999 in subsidies was $70,117, still above U.S. average.

The analysis concluded that:

Large and profitable commercial farms are the big winners in the current distribution of farm subsidies. The ERS data indicate that large commercial farms collected 62 percent of all federal payments. A further breakdown of the data shows that small farms averaged $4,430, though a large share of this came from conservation programs as opposed to commodity subsidies. However, less than 30 percent of small farms received any payment at all. In contrast, 70 percent of commercial farms – which have much higher incomes to start with – received an average payment of $30,483, with direct payments constituting the major component.

Click here to read the report.

Considering the changes in American agriculture since FDR, I think it’s high time for farm subsidies to go. The money can be much better spent to preserve other domestic programs our representatives are looking to slash as they seek funds to pay down the national debt.

Surprisingly, the big shots who agree with me include the folks at the Cato Institute and Heritage Foundation.

This is one time that conservatives are lining up with liberals in the demand for agricultural reform. At a time when politicians in Washington can’t even agree to end the obscene subsidies to oil corporations, which have become the world’s most profitable ventures, a lot of Republicans and Democrats are in agreement on this issue.

But  the agricultural giants are sure to resist any attempt to take away their tax subsidies. And corporations have a stranglehold on Congress.

So will Washington do the sensible thing this time?

We’ll have to wait and see.