Have Farmers Been Forgotten by Washington?
Standing before some of the nation’s most heavily subsidized farmers, President Trump said that America’s farmers would be “forgotten no more.”
Have the largest, most successful farmers been forgotten by Washington?
It’s hard to think of a special interest that has been lavished with more taxpayer subsidies than America’s mega-farms. But after the president’s speech Monday before the American Farm Bureau Federation, the American Enterprise Institute released a study on farm subsidies entitled “Where the Money Goes.”
As it turns out, most of the money goes to the farm country equivalent of the 1 percent.
The AEI report, written by three agricultural economists, found:
- The largest 10 percent of farms, measured by crop sales, received more than 60 percent of all farm subsidies, including commodity and crop insurance subsidies.
- By contrast, the bottom 80 percent of farms got less than 20 percent of all farm subsidies. In fact, payments to the bottom 80 percent were equal to those to the top 2 percent.
- More than half of the bottom 70 percent of farms got no subsidies at all.
The AEI report found that crop insurance subsidies are tilted just as heavily to the most successful farms as traditional commodity subsidies. The top 10 percent of farms received almost 70 percent of all crop insurance subsidies. The top 2 percent received 30 percent of all premium subsidies – about $50 an acre, or four times more than the average crop insurance subsidy recipient receives.
By any measure, the large commercial farms receiving the lion’s share of farm subsidies are wealthy. The median wealth of the nation’s 50,000 largest commercial farms is $6.9 million, according to the Department of Agriculture’s Economic Research Service. Large and very large commercial farms reported median household incomes of $340,000 and $1.1 million, respectively, in 2015.
The new report comes on the heels of a recent USDA report that also found farm subsidies overwhelmingly flow to the largest and most successful farms, and that the biggest farms are getting a larger and larger share of the pie. The USDA study found about one-third of subsidies went to farms with annual sales of at least $1 million – up from 11 percent in 1991.
At the same time, the USDA found, the share of payments given to small farms has dropped: Farms that make less than $350,000 in sales received 61 percent of payments in 1991, but only 30 percent in 2015. These small farms make up almost 90 percent of the total number of farms nationwide.
It turns out that the largest 1 percent of farm business also harvested most of the benefits of Trump’s tax “reform” bill as well. The USDA released studies this week finding that 70 to 80 percent of the benefits flowed to the top 1 percent of farmers and that some small family farms may see a tax hike.
So have the largest and richest farms been forgotten by Washington? We don’t think so.