USA - Do Farm Subsidies Reduce Rural Poverty?

24.01.2017 423 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
03.05.2026

Vietnam - Aid for agricultural insurance premiums proposed to rise

The Ministry of Finance has proposed increasing support for agricultural insurance premiums and expanding eligible beneficiaries in a move aimed at encouraging greater participation by farmers and agricultural organisations.

03.05.2026

USA - MDARD Awards Over $3.2 Million Through Resilient Food Systems Infrastructure Grant Program

The Michigan Department of Agriculture and Rural Development (MDARD) today announced more than $3.2 million of grants to 10 Michigan entities through the U.S. Department of Agriculture’s (USDA) Resilient Food Systems Infrastructure (RFSI) Grant Program. 

03.05.2026

India - 100 acres of maize and jowar crops reduced to ashes in fire

Farmers, who had worked for months, were just days away from bringing their harvest home. Unfortunately, an accidental fire turned their hopes into ashes, destroying nearly 100 acres of maize crops. 

03.05.2026

Philippines - Abra farmers, fisherfolk benefit from more than P14M crop insurance

Lagayan farmer Roberto Layao is thankful for the crop insurance money he received from the Philippine Crop Insurance Corporation (PCIC).

03.05.2026

India - Fresh hailstorm hits South Kashmir apple belt, farmers seek crop insurance

A hailstorm struck apple-growing villages in Shopian and Kulgam districts, adding to worries of growers already facing erratic weather this season.

03.05.2026

Canada - Organic and seed growers gain access to MASC’s contract price option

Contract price option now offered on organic, pedigreed seed and forage seed acres — and producers have until June 30 to sign on for higher dollar coverage.

29.04.2026

USA - Congress considers farm bill as farmers are pinched by rising costs

A sweeping law that governs crop insurance, conservation programs, and nutrition assistance is up at one of the toughest moments for farmers in recent memory.

29.04.2026

India - Nor’westers wreak havoc across north Bengal, normal life disrupted

Nor’westers wreaked havoc in different districts of north Bengal late on Tuesday night. Trees were uprooted, the electric supply was affected, along with standing crops. Many areas also witnessed waterlogging.