Today We Learn About: Agriculture Subsidies in the United States

The United States should eliminate agricultural subsidies to domestic farmers. This policy costs the taxpayer $177.6 billion dollars from 1995 to 2006.1 In addition, a vast majority of subsidies go to a very small portion of our nations farmers and keep the price of certain foods higher than free market value.2 There is a notion that farmers would be poor if not for subsidies, or that a lack of subsidies would be a national security issue. These statements are not true.

More is spent on agricultural subsidies than other departments of government as a whole. As per the United States budget for fiscal year 2006, more was spent in the Department of Agricultural in 2004 than in the Departments of Commerce, Interior, Justice, Labor, Transportation, Treasury, NASA, National Science Foundation, Social Security Administration, and the Corp of Engineers. In addition, more was spent on subsidies than on the Environmental Protection Agency, Executive Office of the President, Judicial Branch, and Legislative Branch combined.3 These numbers have remained stagnant over the last few years. Meanwhile, a Fox News poll from May of 2009 indicates that Americans are looking for less spending from their government.4

According to Environmental Working Group’s Farm Subsidy Database, 67% of farmers do not collect government subsidies and of those that do, 10% collect 74% of all money handed out. The notion that farm subsidies keep small farmers thriving is inaccurate. The Heritage Foundation states, “Nor do farm subsidies contribute to lower food costs. Two-Thirds of food production is unsubsidized and thus relatively unaffected by subsidies. Of the remaining one-third, conservation programs that raise prices balance price reductions caused by crop subsidies. Furthermore, food prices are based not only on crop prices, but also on food processing, transportation, and marketing costs.”5

There is no crisis of farmer poverty. The average farm household earns $81,420 annually (29 percent above the national average); has a net worth of $838,875 (more than eight times the national average); and is located in a rural area with a low cost of living.6

The abolition of farm subsidies would not lead to a national security crisis. Not only does the United States export a quarter of its food production, 7 but also there are many other unsubsidized food items such as poultry, beef, fruits and vegetables that have not been driven out of America. The idea that America may depend on foreigners for food is alarmingly inaccurate.8

The American taxpayer, consumer, and farmer would all stand to benefit largely from the abolition of agricultural subsidies. Our nation would save money during a time of fiscal crisis, our consumers would have the ability to buy food stuffs at a discounted rate, and our farmers would be enticed to operate in a free and open market. By getting rid of a program that was intended to be temporary following the Great Depression, we stand to gain much more than we stand to lose.

1 Henry Wallace, cited in Oxfam America, “A Vision for the 2007 Farm Bill,” 2007, at www.oxfamamerica.org/resources/files/OA-Fairness_in_the_Fields.pdf via http://www.heritage.org/research/agriculture/bg2043.cfm

2 Remedying Lower Prices with Lower Prices, and Corporate Welfare – http://www.heritage.org/research/agriculture/bg2043.cfm

6 Ted Covey et al., “Agriculture Income and Finance Outlook,” AIS–84, U.S. Department of Agriculture, Economic Research Service, November 2006, pp. 40 and 48, at http://usda.mannlib.cornell.edu/usda/current/AIS/AIS-11-30-2006.pdf (June 4, 2007).

7 The U.S. runs a trade surplus in agriculture. See Economic Research Service, “Value of U.S. Trade—Agricultural, Nonagricultural, and Total—and Trade Balance, by Fiscal Year,” May 2007, at http://www.ers.usda.gov/Data/FATUS/DATA/fynonag.xls (June 4, 2007).

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2 Comments

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2 responses to “Today We Learn About: Agriculture Subsidies in the United States

  1. By far the most concise and up to date information I found on this topic. Sure glad that I navigated to your page by accident. I’ll be subscribing to your feed so that I can get the latest updates. Appreciate all the information here

  2. Another quality post. I put in a plug for your blog at mine. Anyway, I am sure most people forget the point you are making.

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