Annual Farm Subsidies to Reach 10-Year High

It is never easy to be a farmer, with constant threats ranging from bad weather to pests to volatile commodity prices. The U.S. Department of Agriculture (USDA) has long operated a crop-subsidy program in order to protect farmers from such externalities. But these subsidies do not go to the Hmong strawberry farmers in the San Joaquin Valley or the local peach orchard in Georgia. Instead, U.S. agriculture favors greens for the select few, but we are talking about wads of dollar bills, not romaine or kale.

The overwhelming share of subsidies go to agribusiness firms that produce those once-coveted industrial crops such as soy and corn. There was some taxpayer relief during the global price commodities boom, but since that market has crashed, Uncle Sam had to rush in and pay the difference. In fact, the Congressional Budget Office (CBO) estimates that payments disbursed by the Commodity Credit Corp., the entity that distributes agricultural subsidies, will surge to approximately $10.2 billion this year -- almost $3 billion more than during the 2015-2016 fiscal year.

Farm subsidies have long exasperated Americans of all political stripes, while politicians on both the left and right -- from California to the Midwest -- have long resisted any reform if their constituencies suffer any financial impact. Although farming has long been a small part of the U.S. economy, and farmers are a tiny share of the electorate, their checkbooks have been influential in slowing any reforms that reflect the needs of 21st-century society.

So, while some senators from influential farming states, like Iowa’s Charles Grassley, have incessantly railed against government loans to companies like Solyndra that went awry, they have turned the other way when problems relate to the USDA’s farm subsidy programs. For example, The Economist pointed out that between, 2007 and 2011, $3 million was paid to 2,300 farms where no crops were grown. And during a four-year period ending in 2012, $10.6 million was paid to farmers who had been dead longer than one year.

Farm subsidy programs in total cost American taxpayers about $20 billion a year. When adding programs such as SNAP (food stamps) and subsidized school meals, which arguably benefit big agribusiness firms more than the working poor or students, that total climbs even higher. Some of the largest companies in the U.S. have not only lobbied against cuts to any food subsidy programs, but they have also opposed any changes to these subsidies that could encourage more healthful eating habits.

The result is that while the current presidential administration has made some logical adjustments to the nation’s farming and food policies, it is still akin to hamsters running in circles — the only difference is that those hamsters are able to stay healthy.

While society frets over the increase in the obesity and heart disease rates — and the financial costs in managing those health problems — the U.S. government still favors financial support for crops that, at best, do little for public health. Organizations such as the Union of Concerned Scientists have long advocated for a rethink in what we encourage farmers to grow. Farmers who raise crops such as corn, soy or wheat cannot get any subsidies if they grow fruits or vegetables on that same land. And while subsidizing the cultivation of berries and greens would be a fool’s game, access to crop insurance would help encourage crops far more healthful.

The way such programs are currently designed, however, is now are far too onerous for the average small farmer. In fact, for some farmers, it has become more profitable to install solar panels than grow anything on their land at all.

Image credit: Leon Kaye