US farm policy: We know where we have been, but do we know where we are going?

Tractor by spirit of america / Shutterstock.com

Article Highlights

  • Subsidies to the US agricultural sector have become increasingly difficult to justify.

    Tweet This

  • In America, average farm household incomes are now substantially higher than average non-farm household incomes.

    Tweet This

  • About 80% of farm subsidies are received by the largest 20% of farmers who are much wealthier and have higher incomes.

    Tweet This

 

Introduction

In the United States, the federal government has been involved with, and provided subsidies for, farmers and the agriculture sector since at least 1862, when the Morrell Act established the Land Grant University system to encourage both agricultural research and education. Beginning in 1933, with the Agricultural Adjustment Act, farm policy became increasingly focused on providing direct subsidies for farmers to increase farm household incomes, especially when commodity prices were low. After eight decades of federal support, most farm organizations in the United States have come to view farm subsidies as tax payer funds to which they are entitled and are mortified when policy makers or other commentators suggest that those subsidies should be reduced.

In fact, subsidies to the US agricultural sector have become increasingly difficult to justify as, in stark contrast to the 1930s, in America average farm household incomes are now substantially higher than average non-farm household incomes. Moreover, the average farm household is six or seven times wealthier than the average non-farm household. In addition, about 80 percent of farm subsidies are received by the largest 20 percent of farmers who are much wealthier and have much higher incomes. Nevertheless, farm organizations in the United States continue to be powerful lobbies that have a great deal of influence with key House and Senate Congressional Agricultural Committees, whose members largely come from rural states and constituencies. In addition, especially since the early 1980s, those farm lobbies have also formed effective alliances with other interest groups, including environmental, agricultural business, and insurance organizations. As a result, they have been able to sustain those transfers to farmers from taxpayers, albeit in shifting forms.

 

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Vincent H.
Smith

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
    MON
  • 28
    TUE
  • 29
    WED
  • 30
    THU
  • 31
    FRI
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.