Farm Subsidies

(Photo: Elly Lange / Getty Images).

Many experts argue that U.S. farms don't even need subsidies. After all, they are located in one of the world's most favorable geographic regions. It has rich soil, abundant rainfall, and access to rivers for irrigation when rainfall fails. Today's farms have all the advantages of modern business. They have highly trained labor, computerized equipment, and cutting-edge chemical research in fertilizers and seeds.

But America's food supply must also be protected from droughts, tornadoes, and recessions. In fact, agricultural subsidies were originally created to help farmers ravaged by the Dust Bowl and the Great Depression of 1929.

This price support system lasted until the 1990s. The federal government guaranteed farmers a high enough price to remain profitable. How did it do this? It paid farmers to make sure supply did not exceed demand. The government subsidized farmers to keep croplands idle in order to prevent overproduction. It also bought excess crops. It then either stored them or gave them away to feed low-income people throughout the world.

Most subsidies went to farmers of grains, such as corn, wheat, and rice. It’s because grains provide 80% of the world's caloric needs. By 1999, farm subsidies had reached a record $22.5 million.﻿﻿

Between 2001 and 2006, farm subsidies tapered off a bit, averaging $19 billion a year.﻿﻿ Of this, about 15% was wasteful, unnecessary, or redundant.

Between 1995 and 2010, farm subsidies had ballooned to $52 billion a year on average. Of this, more than 6% went toward four "junk food" components: corn syrup, high-fructose corn syrup, corn starch, and soy oils.﻿﻿ Many people wondered why the federal government was subsidizing food that contributed to America's obesity problem.﻿﻿

During the recession, as lawmakers looked for ways to cut the budget, many asked, "Do corn growers need subsidies?" In 2011, a record 12.4 billion bushels of corn were produced. In 2012, 94 million acres of corn were scheduled to be planted. This was more than in any year since World War II.

By 2017, large farms dominated the industry.﻿﻿ Farms generating $1 million or more in sales produced two-thirds of the nation's agricultural output. Only 4% of farms were that large. Big farms gobbled up small ones that couldn't compete. They relied on economies of scale to produce more food at a cheaper price. That sent prices down even more, putting more small farmers out of business.

The 2012 budget proposed a 22% cut to farm subsidies, including the $5 billion direct payment program. Half of farmers receiving subsidies made more than $100,000 a year. Between 1995 and 2016, the top 10% of farmers received 77% of subsidies.﻿﻿ The top 1% received 26% or $1.7 million per recipient. The top recipient was Deline Farms Partnership, which received $4 million in 2016.

The House budget also proposed $180 billion in cuts to the farm subsidy program.﻿﻿ But $133 billion of the cuts were to the food stamp program, affecting 8 million consumers, not farmers.