The American Enterprise Institute Thinks All Farmers Are Wealthy

The American Enterprise Institute (AEI) is promoting its report this week titled, "American Boondoggle: Fixing the 2012 Farm Bill." The report is based on 12 papers dealing with how to overhaul farm policy. Obviously, it's clear from the title that the authors of the papers are against farm programs as they currently exist. In fact, the authors of the papers call for farm programs to be reduced by $100 billion over the next 10 years.

I am not in favor of most farm subsidies, namely because many farmers in the San Joaquin Valley where I reside, considered to be the agricultural center of the world, do not benefit from them. A University of California (UC) Davis analysis states that the majority of the commodities produced by San Joaquin Valley farmers do not benefit from government subsidies. The exceptions are milk, hay and cotton, which are only a third of all the San Joaquin Valley's farm sales. However, I object to the AEI's characterization of all farmers as "wealthy."

Vincent Smith, director of the Agricultural Marketing Policy Center at Montana State University, claimed that farmers are "on average…three-and-a-half times wealthier than the average American household." He said during the press conference, "Those farm families who receive these benefits are very much among the wealthiest citizens in our country."

One of the papers making up AEI's report is titled, "We’re Not in Kansas Anymore." The author, Barry K. Goodwin describes farmers as a "segment of society that now tends to be relatively wealthy may be waning." My first reaction after reading that statement was to ask, "Has he ever met any farmers?" I immediately thought of a friend of mine who runs a farm with her husband. Being self-employed like other business owners, they buy health insurance through the company they sell their raisins to. It's not the best health insurance, as they found out when she had cancer a few years ago.

Godwin believes that "farmers do not generally face more risk than business owners in other sectors." Quite the contrary-farmers face added risks that other business owners do not. In short, farmers are at the mercy of the weather. I remember my mom telling me that when she was growing up, if it rained, the whole family would roll grape trays in the middle of the night. Raisin farmers lay grapes out to dry on paper trays. If the trays are not rolled when it rains, the crop will be ruined.

Most farmers, contrary to what the AEI report states, struggle to make ends meet. They are not wealthy by any means. Less than one in four U.S. farms produce gross revenues more than $50,000, according to the EPA. It is estimated that living expenses for the average farm are more than $47,000 a year. "Clearly, many farms that meet the U.S. Census' definition would not produce sufficient income to meet farm family living expenses," the EPA states.

Photo credits: From the author's private collection