Farm Bill 2013: Small Farmers Can't Make Money From Farming Anymore

In a trend that began a couple of years ago, Big Food ads by company’s like McDonald’s and Burger King started emphasizing the fresh, wholesome farms from whence your burger and fries came. The ads typically featured rolling green hills and salt-of-the-earth farmers, hiding any hint of the industrial food machine behind mass-produced fast food. That’s because these companies understood that no one wants to picture their burger coming from a cow pumped full of hormones standing around in a giant grassless feedlot that stretches for miles.

These ads hid the reality of farming in America, which the Farm Bill 2013 reinforces. Farming is not profitable for small farmers. According to the USDA, “Most farm income is concentrated in households associated with commercial farms, which represent 10.3 percent of the farm population.” The median farm operator household consistently has a net loss from farming activities, and has to rely on “off-farm activities to sustain them.”

And, what’s worse, the U.S. government is essentially giving handouts to big commodity farmers. Members of Congress may moan and gripe about government handouts to the needy and poor among us, but many seem perfectly fine with what amounts to corporate welfare.

Every year, commodity farmers (those who grow predominantly corn, soy, wheat, or cotton) are given $5 billion in direct subsidies, whether they need them or not. These handouts don’t go to small farmers; rather, large farms and agricultural corporations receive the bulk of this munificence. And farmers got paid whether they farmed or not.

Under the new Senate farm bill, which just passed last week, these direct subsidies will finally be eliminated. However, they will be replaced by a $9-billion expansion in crops insurance support, which reimburses farmers for losses caused by weather.

Farming is a risky business, some claim. To ensure a stable food supply, farmers should have insurance against natural disasters. Fair enough. But should the government be footing the majority of the bill on insurance subsidies? For every dollar of an insurance premium, on average, farmers pay 38 cents. Taxpayers chip in 62 cents. The government also pays an additional $1.3 billion to insurance companies and agents that sell policies to farmers. Unlike most insurance policies with which we’re familiar, crop insurance insures against crop failure due to droughts or floods, but also protects against price drops. Crop insurance programs are meant to encourage farmers to buy these policies. And they’re cheap because taxpayers are covering about 60% of crop insurance premiums.

The problem: Critics say that crop insurance has reduced the risk of farming too much. Farmers are now almost incentivized to farm on marginal lands, like wetlands or lands with less desirable soil. The Environmental Working Group (EWG), a national environmental public interest organization, says that about a third of these subsidies go to the biggest 4% of farm operators. The EWG keeps maintains a database of farm subsidies, and claims that “largest recipients of crop insurance receive more than $1 million a year in subsidies.” Oxfam, an anti-hunger advocacy group, argues that aid to American farmers hurts farmers in poor countries who can’t compete in the global marketplace. Those who support local/organic/alternative farming feel that these subsidies go to big agribusinesses growing commodities, not to small farms or organic farms.

Washington’s agricultural policy favors large and highly profitable farm operations. In contrast, small-scale producers struggle to establish and access new markets. Few public resources are put towards helping small and mid-sized family farmers. According to EWG, between 2008 and 2010, the government spent $39.4 billion subsidizing grains and cotton, more than eight times the amount of money paid out on specialty crops (vegetables, fruits and nuts), despite the fact that these commodities' market value was only twice that of specialty crops.

At a time when the debt is forcing budget cuts, including for programs like food stamps, the farm bill 2013 forces us to ask: How much should we subsidize farmers? After food stamps, crop insurance is the largest program in the farm bill. Other sectors of the economy don’t receive government subsidies or subsidized insurance to the same degree. The farm bill’s crop insurance subsidies are just another way of advancing big agribusinesses interests. If the U.S. is serious about farming interests and health, the government should put that money towards providing much-needed support for small-scale and organic farming, as well as initiatives that make healthy local food more accessible to Americans.