We Don’t Have to Keep Shoveling Money to Big Ag

Turns out 2020 was a good year for Big Ag.

Agricultural subsidies in the United States surged to over $46 billion, more than doubling the 2019 price tag ($22.7 billion) and accounting for nearly 40 percent of net farm income. This overstuffed feed bag of corporate subsidies reflected not just the usual run of commodity price supports, but also assistance under the Coronavirus Food Assistance Program (direct aid for producers claiming COVID-related price declines of marketing costs) and the Market Facilitation Program (acreage-based subsidies for producers harmed by the trade tiff with China). Taken together (see Figure 1), these programs pushed direct farm aid to unprecedented levels.

Figure 1: Direct Government Payments to Farmers, 1933–2020

Source: USDA Economic Research Service

Farm subsidies were invented in response to price disparities and price volatility that plagued the agricultural economy after World War I, and especially after the 1929 crash. At the time, the need was acute: family farms were at the mercy of not just fickle agricultural markets, but railroad and elevator monopolies, and predatory lending in an era of costly mechanization. Between 1921 and 1940, farm foreclosures averaged nearly 100,000 per year — and double that in the worst years of the Great Depression.

Since then, the number of farms has fallen dramatically (from almost 7 million in 1935 to just 2 million today), and the average farm size has nearly tripled. By 2015, over half of farm production came from farms with at least $1 million in sales, and over a third of all cropland was on farms larger than two thousand acres. That consolidation — as Figure 1 underscores — was accompanied by a fourfold increase in federal subsidies. Corporate agriculture, fattened on government aid, swallowed up the family farm and then waddled back for more.

Federal agricultural policy in the United States does not subsidize “farming” — it overwhelmingly bankrolls a particular kind of farming dominated by large landowners (or banks). Between 1995 and 2000, the top 20 percent of subsidy recipients claimed over 90 percent of federal aid, the top 5 percent claimed 61 percent, and the top 1 percent claimed 26 percent.

Subsidies are concentrated in a few states, both in raw dollars and as a share of farm income. Going back to 2019 (the last year state-level data is available), Southern and Midwestern states crowded the subsidy trough, with Michigan, Ohio, North Dakota, Kansas, Illinois, Iowa, Minnesota, and Arkansas all drawing more than half of net farm income from USDA programs (see Figure 2).

Figure 2: Direct Government Payments as a Share of Net Farm Income by State (2019)

Source: USDA Economic Research Service

It’s hard to marshal a credible argument for this kind of largesse. Farm subsidies benefit those who need them the least, especially large landowners. Under the Market Facilitation Program, the top 1 percent of farms have gobbled up 16 percent of the payments, at an average payment of over half a million dollars.

If that wasn’t bad enough, the deep bias in federal farm aid toward fencerow-to-fencerow, fertilizer-intensive cultivation yields substantial environmental damage in local land and water quality, as well as downstream. The annual value of the corn crop, to cite but one example, pales next to the annual cost of the environmental devastation harvested from the same fields. Federal aid bankrolls industrial food products (corn and soy) at the expense of crops delivering real nutritional value — undermining public health and helping drive up rates of heart disease and obesity.

But, perhaps most starkly, spending on farm subsidies underscores our twisted policy priorities. At $46.5 billion in 2020, farm subsidies were nearly three times the federal block grant to states for Temporary Assistance for Needy Families (TANF). Farm subsidies in 2020 exceeded all budgeted federal spending on community and regional development ($32 billion), and on elementary, secondary, and vocational education ($43 billion). Farm subsidies pretty much matched federal spending on natural resources and the environment (47 billion). And they fell just behind the paltry $53 billion set aside for federal housing assistance.

We need to fundamentally rethink our farm policy, using the Green New Deal as a template. USDA programs aim narrowly at maximizing production and promoting American agriculture products and exports. They do little to pursue the department’s broader charge, dating back to the 1930s: to foster rural prosperity and sustainable stewardship of the land.

Those goals demand a decidedly different approach, one that makes sustainable farming viable while empowering farmworkers and attacking the power of agribusiness — challenging not just the unchecked heft of corporate producers in key sectors and commodities, but also the tentacles of business control in seed, fertilizer, and farm equipment.

Cutting off subsidies to Big Ag would be a first step to freeing up resources for rural development; and for polices that reward conservation rather than pillage, diversification rather than monoculture, and living-wage, unionized jobs rather than heavily exploited work in the “factories in the field.”


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