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Defining a True Safety Net for Struggling Farmers

Defining a True Safety Net for Struggling Farmers

Monday, October 11, 2010

By David DeGennaro, Environmental Working Group Legislative Analyst

With Congress in recess, talks on reshaping the federal Farm Bill, due for action in 2012, have been set aside while nervous lawmakers focus on the November elections.

But that hasn’t eased the new scrutiny being given to America’s free-spending and complex labyrinth of farm programs in the aftermath of the US Department of Agriculture’s decision to fund a dubious farm disaster aid program sought by embattled Sen. Blanche Lincoln. It received USDA’s support at the demand of outgoing White House Chief of Staff Rahm Emanuel in what looks suspiciously like a bid to save the Arkansas Democrat’s Senate seat.

Farm disaster spending is nothing new, but the particular program envisioned by Sen. Lincoln is particularly galling because it sets the bar so low for agribusiness to qualify for assistance.  A farm operation need only assert it sustained a 5 percent crop loss in 2009 to qualify for a government check.  This trivial loss is being described as part of the “safety net” that keeps farmers in business, producing the food and fiber we need.

At the Environmental Working Group, we think this claim warrants a fresh examination of just what the farm safety net actually looks like, as opposed to the rosy rhetoric around it.

For those who view the nation’s simultaneous obesity and hunger epidemics as proof positive of a broken food and farm system, engaging in the debate over farm policy reform is a top priority. As the saying goes, “If you’re not at the table, you’re on the menu.”

The defenders of farm subsidy programs always balk at trimming the billions of dollars of payments that go to large, profitable, plantation-scale farm businesses, so it’s fair to look at how this supposed “safety net” for farmers really works.

If you, for example, were lucky enough to be making $210,000 a year, you’d probably be overjoyed to get a $30,000 bonus on top of that – just for punching in.

In 2008, $210,000 just happened to be the average household income of farms that received at least $30,000 in government payments that year.

That’s the deal given to America’s most affluent commodity farmers, the lucky folks who get a government handout year after year thanks to the multi-layered federal system of farm subsidy payments. Its defenders argue that this “safety net” protects the safe and abundant food supply that the United States enjoys.

Safety net?

In a circus, the safety net is strung far below the high-wire performers in case they lose their balance and plunge to earth. A fall is scary to watch, but in most cases the tightrope walker comes away unscathed.

In the case of American farmers, it’s as if the safety net were strung a mere six inches below the tightrope. For wealthy, often corporate-owned farms, it amounts to lifetime, planting-to-harvest protection, and it pays off just as handsomely whether you’re losing money – or, as is more often the case, doing just fine.

It’s a great deal for wealthy farmers who grow commodities like corn and cotton; not so for taxpayers who paid $17 billion in 2008 to put up that net.

In general, the big winners are large and profitable commercial farms. These big concerns collected 62 percent of all payments in 2008, while at the other end of the scale, less than a third of the nation’s small farmers received any payments at all. The small guys who do get something aren’t getting rich. In 2008 the average payout for small farmers was just $4,430.

Looking at the wider picture, it’s not as if farmers overall have been suffering in recent years. The median income for farm households of all sizes in 2008 was nearly $51,000, only slightly higher than the median for all US households -- but $10,000 more than their non-farming, rural neighbors

Meanwhile, a couple earning $1.5 million from their farm can easily get direct payments as high as $80,000 every year, indefinitely. That’s a lot of “safety” for someone who arguably doesn’t need it.


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