Do Agriculture Subsidies Help Save Family Farms?

You Can Guess At The Answer

By Pejman Yousefzadeh Posted in | Comments (7) / Email this page » / Leave a comment »

No, they do not.

And now, for the second question: Why do we continue to maintain them? (Read on.)

The cornerstone of the multibillion-dollar system of federal farm subsidies is an iconic image of the struggling family farmer: small, powerless against Mother Nature, tied to the land by blood.

Without generous government help, farm-state politicians say, thousands of these hardworking families would fail, threatening the nation's abundant food supply.

"In today's fast-paced, interconnected world, there are few industries where sons and daughters can work side-by-side with moms and dads, grandmas and grandpas," Rep. Jerry Moran (R-Kan.) said last year. "But we still find that today in agriculture. . . . It is a celebration of what too many in our country have forgotten, an endangered way of life that we must work each and every day to preserve."

This imagery secures billions annually in what one grower called "empathy payments" for farmers. But it is misleading.

Today, most of the nation's food is produced by modern family farms that are large operations using state-of-the-art computers, marketing consultants and technologies that cut labor, time and costs. The owners are frequently college graduates who are as comfortable with a spreadsheet as with a tractor. They cover more acres and produce more crops with fewer workers than ever before.

The very policies touted by Congress as a way to save small family farms are instead helping to accelerate their demise, economists, analysts and farmers say. That's because owners of large farms receive the largest share of government subsidies. They often use the money to acquire more land, pushing aside small and medium-size farms as well as young farmers starting out.

"Historically, when you think of family farms, you think of Mom and Dad and three generations working a small or mid-sized farm. It gives you a warm and fuzzy feeling," said Alex White, a professor of agricultural economics at Virginia Tech. "In the real world, it might be a mid-sized farm. But it also might be a huge farm. It might be a corporation."

Large family farms, defined as those with revenue of more than $250,000, account for nearly 60 percent of all agricultural production but just 7 percent of all farms. They receive more than 54 percent of government subsidies. And their share of federal payments is growing -- more than doubling over the past decade for the biggest farms.

This really should be the kind of thing that we can bring to an end. Liberals dislike corporate subsidies because of a deep and abiding suspicion of Big Business. Small-government conservatives and libertarians dislike corporate subsidies because they symbolize government expansionism. As large farms and corporate farming structures are getting the bulk of subsidies, the interests of the aforementioned political groups should converge to bring these payouts to an end.

Whether they will or not is another question. A lot of work has to be done in the near term to create the necessary nation-wide political coalition determined to rein in subsidies and other manifestations of large government.

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Do Agriculture Subsidies Help Save Family Farms? 7 Comments (0 topical, 7 editorial, 0 hidden) Post a comment »

"farm-state politicians say"

I wish they wouldn't say that. The top agricultural state in the union, California, is low on subsidized crops, but high on "specialty crops" - things like almonds, walnuts, winegrapes. Growers I know in specialty crops are extremely unsympathetic to subsidies.

Archer Daniels Midland and others are VERY happy with the status quo. Until you reform campaign finance, this isn't going to change.

Of course Agribusiness still gets huge subsidies through cheap irrigation water, price subsidies (ever wonder why sugar is so expensive in the US?) and more. Nevermind the subsidized grazing rights for cattle. We'd be better off NOT using our water and land to produce exported soy, wheat, beef and more. Been by Lake Mead or Powell lately? The west is running out of water. And when it comes to pigs and chickens, anyone downwind of an industrial production facility warehousing these critters will tell you that this is NOT a good business model. Russia and exFSU countries get all the thighs and legs left over when the white meat goes into chicken nuggets.

Again, LESS government is better. The US pushes "free competition" when it comes to globalization for corporate manufacturing but we're real protectionist when it comes to big agriculture. We're using up OUR water and soil to push subsidized agricultural products on the rest of the world while we all pay prices higher than they need to be.

ah for the good old days when government was small and competent, budgets were balanced, our rights were intact and we were respected in the world. What on earth has happened?

Couldn't agree more.

If you mean to say that ADM donations change people's votes, say it in a diary so we can debate it without the innuendo and implication giving anyone cover.
--
Run like Reagan!

The USDA has compiled a large file showing who received what in agricultural subsidies. Though the information is public, they do not have it available on their website, claiming the file is too large.

This link takes you to the database.

http://www.ewg.org/farm/index.php?key=nosign

Having read the 2002 and 1996 Farm Bills cover to cover our politicians (both sides) created this problem with the 2002 Act. The 1996 Act was designed to REDUCE farm program payments and was succeeding. The 1996 Act was called for market based reforms, BUT the Asian market crisis in 1997 resulted in Congress (in their infinite wisdom) approving of emergency funding to bail everyone out when the price got low. Even looking at the 2002 Bill when it was enacted the price didn't look all that bad (government spending standards of course), but every year no matter what commodity price are several additional billion in aid gets spent.

The debate on the new farm bill from my reading tends to be more focused on how to get more "program crops" and livestock in the bill then to actually reduce the size of subsidies. Being a free market guy it would be better for farmers if subsidies were gone, the strongest would survive. For consumers prices would increase, maybe dramatically, maybe not. To me the both sides in this issue are advocating for the wrong thing, susbsides keep prices low, which helps consumers and hurts the farmers they were designed to help.

I was hopeful about a year ago that the new Farm Bill would contain reduced subsidies, but I highly doubt Ag Committee Chairman designate Harkin (D-IA) would even entertain the idea. Look for more of the same, maybe more subsidies for ethanol, or higher subsidies for the current program crops. If not in a direct form it will be in the form of revenue based insurance to get around WTO problems. On top of that look for $4.5 billion in "disaster" aid for the 2005 crop year to rear its ugly head in the new congress (got shot down in the current Congress as even USDA didn't want it that big). Here's to hoping Senator's Coburn and DeMint are ready for battle.

You also have to ask yourself, is a closely held family corporation a family farm? Family farms are undefined in the scope of any farm support programs. Who is to say my 2000 acre family owned farm is not a family farm, but my neighbors 200 acre farm is a family farm. The only defining aspects are payment limits, which are easy to get around and more theoretical than practical, plus some income limits. I think the income limit is $2.5 million and over are not qualified for payments, UNLESS that income is from farming.

 
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