USA - Do Farm Subsidies Reduce Rural Poverty?

24.01.2017 594 views
Rural voters played an important role in the last election. As the Senate considers a new Secretary of Agriculture and Congress begins work on a new Farm Bill, it’s important to consider the effect that food and farm policy has on rural communities, especially those that are impoverished. Farm lobbyists frequently insist that farm subsidies are critically important to supporting the rural economy. “It's not so much a safety net for farmers as it keeps rural America alive,” said one proponent of corn subsidies. “Agriculture forms the lifeblood of many rural communities,” according to an advocate for cotton farmers. So, according to the logic of these farm lobbyists, farm subsidies are “crucial to the economic security of rural America.” Even modest cuts to subsidies for “Cadillac” crop insurance policies would “[hit] rural America where it hurts most,” according to Senate Agriculture Committee Chairman Pat Roberts. The truth is that farm subsidies play little role in reducing rural poverty. That’s according to a paper by three leading agriculture economists commissioned by the American Enterprise Institute, or AEI. It confirms the findings of a 2013 paper by other leading economists. Here’s why. Farm subsidies overwhelmingly flow to the largest producers of bulk commodities, so “these benefits are mainly distributed to large commercial-sized farms,” wrote the authors the of AEI-sponsored paper. According to EWG’s Farm Subsidy Database, 77 percent of farm subsidies paid between 1995 and 2014 flowed to the largest 10 percent of subsidy recipients. The top 1 percent of subsidy recipients received 26 percent of all payments. As a result, roughly 30,000 very large farm businesses have received more than $46 billion in subsidy payments – or $1.57 million per farm – over the last two decades. While some very large operations receive more than $1 million annually in subsidies, the bottom 80 percent of subsidy recipients annually collect less than $10,000. “While farm subsidies transfer income from taxpayers to farm owners, most of the direct beneficiaries are relatively wealthy,” the economists concluded. The median wealth of the nation’s 50,000 largest commercial farms is $6.9 million, according to the USDA’s Economic Research Service. What’s more, many subsidies also flow to urban residents, not farmers – including the Trump administration’s nominee for Secretary of Agriculture, former Georgia Gov. Sonny Perdue. According to EWG’s Farm Subsidy Database, between 1995 and 2004 Purdue collected $278,000 in farm subsidies, even though he is not a farmer. Purdue owns farms – which he leases to farmers – and ran businesses that sell fertilizer and store grain. But EWG could find no evidence that Purdue has been a farmer since he left his family’s farm for college more than 50 years ago. Thousands of city slickers like Purdue continue to collect farm subsidies. But these are not the only reasons why subsidies do not reduce rural poverty. Farming accounts for only 6 percent of employment in non-metropolitan counties – employing far fewer people than transportation, utilities, manufacturing and services. “Farm income and employment are small shares of the rural economy almost everywhere in the United States,” according to the AEI experts. “Even with multiplier impacts that affect nonfarm employment and income opportunities, farm subsidies do little for rural poverty.” Farm workers, rural residents, and others in farm-related occupations receive little additional income from farm programs, the experts wrote. Despite warnings of a “farm crisis,” farm household income is still growing – even as the price of some bulk commodities return to normal. The USDA projects that median farm household income is $20,000 higher than that of non-farm households. Large and very large commercial farms reported median household incomes of $340,000 and $1.1 million, respectively, in 2015. Most farm households do not face the risk of poverty, according to the new AEI paper: “If the goal is to reduce poverty in the United States, focusing on farm operator households is unlikely to have much impact.” Many of the counties that receive the most subsidies are also among the counties with the nation’s highest levels of poverty and diet-related disease. Moreover, farm workers, who earn about $9 an hour, tend to pick fruit and vegetable crops that do not benefit from the lion’s share of farm subsidies. So do farm subsidies reduce rural poverty? According to the experts, the USDA does “many things to promote rural development,” such as offer loans to upgrade wastewater utilities, “but the agriculture subsidy programs are not central to that effort.” The reason why is clear: Most subsidies flow to the largest and most successful farm businesses, and have little impact on the rest of the rural economy. Source - http://www.ewg.org
27.09.2026

Canada - Saskatchewan tornado count climbs to 39 with two late-August twisters confirmed

Saskatchewan’s 2026 tornado count has climbed to 39 after the Northern Tornadoes Project confirmed two additional tornadoes from a late-August storm system.

27.09.2026

Uzbekistan plans to reform agricultural subsidies and insurance

Uzbekistan plans to change its approach to agricultural subsidies and insurance. President Shavkat Mirziyoyev reviewed proposals to link state support to specific results, expand insurance coverage and further digitize the sector, the Uzbek presidential press service said.

27.09.2026

India - Centre to launch Livestock Insurance Portal to help farmers

The Centre's Department of Animal Husbandry and Dairying will launch the Livestock Insurance Portal on Monday, marking an important milestone in the digital transformation of livestock insurance services in the country, according to an official statement issued on Sunday.

27.09.2026

Nepal - Agriculture department warns farmers of crop damage from heavy rain and winds

The Department of Agriculture has urged caution to minimize potential damage to crops and stored grains due to the possibility of heavy rain accompanied by strong winds. 

27.09.2026

UK aphid outbreak could affect 30 million lettuce heads

UK lettuce growers could lose around 30 million heads due to an aphid outbreak, representing losses of £10 million (US$13.5 million), the BBC reported, citing the British Leafy Salads Association (BLSA).

27.09.2026

India - Heavy rain, floods damage 13,550 hectares of crops in three North Andhra districts

Farmers are now awaiting compensation from the government, seeking relief that takes into account the rising labour and input costs.

24.09.2026

India - Horticulture supports 35 lakh people, contributes 10pc to J&K GDP

Horticulture continues to remain a key pillar of Jammu and Kashmir's economy, with around 35 lakh people, including nearly 7.5 lakh families, directly or indirectly dependent on the sector, the government informed the Legislative Assembly on Thursday.

24.09.2026

Canada - P.E.I. agriculture insurance payouts totalled $110 million for 2025 drought

Drought conditions in the summer of 2025 made for a punishing year for P.E.I. farmers, so much so that claims paid out under a provincial agriculture insurance program added up to $111 million.