USA - Do Farm Subsidies Reduce Rural Poverty?

24.01.2017 334 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
08.01.2026

Pakistan - Balochistan Agriculture Secretary inspects vegetable seed research farm

Balochistan Secretary of Agriculture, Noor Ahmed Parkani, inspected the Vegetable Seed Breeding Division on Mastung Road. 

08.01.2026

Vietnam pushes biopesticides to support green farming

Biological plant protection products have emerged as an important solution to gradually reduce dependence on chemical pesticides, support integrated pest management (IPM), and advance ecological and organic farming.

08.01.2026

Norwegian partners launch research project to help improve salmon resilience against sea lice

Norway's Benchmark Genetics has launched a new research and innovation project that aims to develop new, scalable genetic tools that would enable Atlantic salmon to better resist sea lice through selective breeding.

08.01.2026

Bangladesh expands banana planting across Rangpur region

Banana cultivation has continued to expand across the Rangpur agricultural region of Bangladesh, supported by stable and profitable prices since 2019.

08.01.2026

New Zealand - Canterbury hail losses drive spike in wheat insurance claims

A run of severe hailstorms over the Christmas–New Year period has caused significant damage to arable crops in Canterbury, leading to a sharp increase in claims under the wheat sector’s disaster relief insurance scheme and adding to scrutiny of weather-related risk exposure.

08.01.2026

India - IRDAI focuses on covering every citizen by 2047

Chief Secretary K Vijayanand has said the Insurance Regulatory and Development Authority of India (IRDAI) is working with the goal of providing insurance cover to every citizen in the country by 2047.

07.01.2026

France halts imports of food with traces of banned pesticides

France on Wednesday officialised a ban on food imports containing traces of five pesticides currently banned in the EU, a move aimed at easing farmers' opposition to the Mercosur trade deal with four South American nations. 

07.01.2026

Australia - Roads cut off, more than 16,000 livestock lost as farmers 'lose everything’

Communities in northern Australia have had their roads cut off and face the grim task of counting livestock losses after some areas were hit with the worst flooding in decades.