Farm subsidies are complicated, making them the central front of a heated debate between farmers, politicians and consumers. Farmers don’t like to be dependent on them, but most large-scale producers cannot live without them. Politicians see opportunities for making budget cuts ($245.2 billion was spent on farm payments from 1995-2009 alone, and after all, when subsidies were created during the Great Depression, they were meant to be temporary) and yet these payments are now providing cheap raw materials to the ADMs, Cargills and Monsantos of the world, who give major campaign contributions. Consumers see that the most heavily subsidized crops (corn, soybeans, cotton, wheat, and rice) are producing a lot of things that they no longer want to eat (high fructose corn syrup, processed foods and feedlot meat), but they often misunderstand what is actually needed to transition away from the subsidy system.
Will transparency help to build a more nuanced discussion around changing our farm subsidy system? Today, the Environmental Working Group (EWG) released the latest version of their widely referenced Farm Subsidy Database, with more detailed information on farm payments by individual, county, state and congressional district and including a national summary. In looking at the numbers closely, it becomes apparent that still, the wealthiest farms are receiving the most subsidies. With populist anger over federal spending spilling over, the government searching to get out of debt, and 74% of earnings having gone to the top 10% of farmers from 1995-2009, will farm subsidies finally come under the knife in the 2012 Farm Bill?
EWG’s previous version of the database, launched in 2004, has logged over 200 million searches — a testament to the public interest in the subject — and was responsible for upending the commonly-held beliefs about who is receiving farm payments. In viewing the subsidies by congressional district, you can clearly see why certain politicians are sticking up for farm subsidies. Further, the database shows the public just how much of an underdog fruits and vegetables are in the current system, and that a lot of money that could be spent on conservation programs and healthier school lunches are going to a few wealthy farmers.
The new database also includes analysis of the crop insurance system for the first time, which is essentially an insurance policy for commodity crops made cheaper to the farmer with the infusion of $5.4 billion in tax-payer money in 2009, and that number has been rising. As it currently stands, there is no limit on how much crop insurance can be collected, and only 1% has gone to specialty crops (fruits and vegetables). Crop insurance does benefit individuals, but meanwhile socializes losses — namely, the US government pays half the premium, and actual lost income is paid by the government and not the insurance companies.
House Agriculture Committee Chairman Collin Peterson (D-MN) has suggested that crop insurance be altered in the next Farm Bill to cover the entire farm, instead of a particular commodity crop. He has also suggested that this could be the future of subsidies, phasing out the current farm payment system in exchange for more insurance coverage. This could make way for more diversity of crops on the farm, decreasing risk and giving rise to vibrant local food systems — and you can bet it will be the a subject of much discussion as the Farm Bill debate gets underway.
But the EWG hopes the system will be simplified to provide a genuine safety net for farmers when things happen that are beyond their control. “There is a need for some sort of safety net to tide people through difficult times, serious crop losses,” said Craig Cox, Senior Vice President at EWG. “Commodity markets much more volatile these days and we need a legitimate risk management tool that helps farmers through a rough patch”