Bad Seeds: A Plan to Phase Out the $5 Billion in ‘Direct Payment’ Agricultural Subsidies

Agriculture and the family farm are the foundation of strong and healthy rural communities, and a critical engine of U.S. economic growth. Regrettably, a key aspect of U.S. agricultural policy does not meaningfully contribute to the success of U.S...

May 4, 2011 | Source: Grist | by Jake Caldwell

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Agriculture and the family farm are the foundation of strong and healthy rural communities, and a critical engine of U.S. economic growth. Regrettably, a key aspect of U.S. agricultural policy does not meaningfully contribute to the success of U.S. farmers: Most federal farm subsidies are outdated, expensive, and inequitable.

In an era of fiscal constraint and more immediate budget priorities, many of these ineffective subsidies can no longer be justified. The federal government each year pays owners of historical croplands $4.9 billion in “direct payment” subsidies regardless of whether the people receiving the payments farm their lands. And these payments are automatically made every year despite rising fiscal deficits and a relatively healthy farm economy that saw net farm income grow by 27 percent in 2010.

An exclusive set of commodities — corn, sorghum, barley, oats, cotton, wheat, rice, soybeans, and peanuts — have received 72 percent, or $160 billion, of all U.S. farm payments since 1996. Even among this small group of commodities there are widespread disparities. Upland cotton and rice growers, for example, receive a disproportionately high level of farm program payments relative to the other crops. Meanwhile, fruit and vegetable growers, and the majority of other agricultural producers in the United States, receive minimal direct subsidies despite contributing more than 50 percent of the total farm gate value in the United States.