Posted: May 12th, 2010 by Militant Libertarian
Environmental Working Group’s updated Farm Subsidy Database, released May 5, chronicles where federal farm subsidy dollars have gone from 1995 through 2009, revealing the true impact of farm programs and showing who really benefits from the billions in farm subsidies U.S. taxpayers pay out each year. This analysis goes a step further by examining the economic condition of the farmers and landowners who take home this government money and the broader economic context in which these payments are made.
Our work confirms that current farm programs hardly qualify as a safety net for the family farm but are instead a taxpayer giveaway to big and already profitable farming businesses. Moreover, these payments are likely exacerbating, rather than solving, the problems of rural communities.
Farm country has been doing pretty well the last few years. The five best years ever for farm income have all come since 2003, and 2010 is projected to be near those highs.1 The latest year for which we have data, 2008, was one of those good years, even though farm income was down from the record high of 2007 and slightly lower than the preceding three years, thanks to the start of the worldwide recession. For farmers, 2008 might have been a more profitable year compared to historic trends, but it is representative of the new standard of farm income.
In 2008, the median income for farm households of all sizes was $50,971. This was similar to the $50,303 median for all households.2 But farm households are earning more than $10,000 (25 percent) more than their rural neighbors. The median rural (non-metro) income is just $40,785.3 The average (mean) farm income was $78,803, vs. a national average of $68,424.4
Despite the fact that farm households are doing as well or better than others, the federal government targeted some of those households for billions of dollars in government payments. In 2008, that total amounted to more than $12 billion, according to the US Department of Agriculture’s Economic Research Service. (That’s slightly more than the total computed by EWG, not including crop insurance subsidies.) These payments went to only 39 percent of all farms, and the average payment was $11,922.5
The skewed distribution of subsidy payments is even more striking when you compare the amount of subsidies received to the household income of the farming operations receiving them.