What Would Happen If We Stopped Paying Agricultural Subsidy? (Solution)

Most of the farmland that is predicted to be taken out of rice production would remain out of agricultural production completely. Indeed, if federal farm program payments were cut to 50 percent of the 2000 base year value, our analysis predicts that producers would begin to fallow agricultural land.

Should Agri-agricultural subsidies be stopped?

  • Agricultural subsidies should not be stopped, because many farmers can’t handle the burden of total investment. It’ll be nice if government provide these subsidies to the farmers, who deserve it, not to the rich. Afterwords :- What are your thoughts on this topic?

Should agricultural subsidy be stopped?

Agricultural subsidies should not be stopped but it should be done in an efficient manner so that the needed farmers or poor farmers who are not financially stable can get these facilities and their situation can be improved. Improvement in the agricultural sector is one step towards the development of our country.

Why is agricultural subsidies bad?

Agricultural subsidies help prop up a food system that is neither healthy nor sustainable. But the way governments provide subsidies at the moment exacerbates the health and environmental issues of food production.

Why do we need agricultural subsidies?

Subsidies protect the nation’s food supply. Farms are susceptible to pathogens, diseases, and weather. Subsidies help farmers weather commodities’ price changes. Farmers rely on loans, making their business a bit of a gamble.

What would happen if agriculture was stopped in our country?

If agriculture was stopped then it will hard hit the consumers, their diet would become less balanced. Our country would have to depend on other countries for food and we will have to import food from other countries. We would have to change our diet and depend on other sources of food.

How have subsidies affect the agricultural industry?

AEI scholars note that subsidizing crop insurance encourages farmers “to expand crop production on highly erodible land.”47 Lands that would have been used for pasture or grazing have been shifted into crop production. Subsidies may induce excessive use of fertilizers and pesticides.

What are the problems with farm subsidies?

They harm small farmers by excluding them from subsidies, raising land prices, and financing farm consolidation. They increase trade barriers that reduce incomes in America and in lesser-developed countries. They are falsely promoted as saving the family farm and protecting the food supply.

What are the effects of farm subsidies in the world economy?

These subsidies encourage overproduction. Markets are flooded with surplus crops that are sold below the cost of production, depressing world prices. Countries with unsubsidized goods are essentially shut out of world markets, devastating their local economies.

Do farming subsidies help the environment?

Farm subsidies can be a major aid for both farmers and the environment. Redirecting where these agricultural subsidies go could provide food for millions while protecting and restoring the world’s forests and farms.

Are subsidies good or bad?

Since subsidies result in lower revenues for producers of foreign countries, they are a source of tension between the United States, Europe and poorer developing countries. While subsidies may provide immediate benefits to an industry, in the long-run they may prove to have unethical, negative effects.

What are the disadvantages of subsidies?

Subsidies have disadvantages, including the possibility of shortages of goods. One of the advantages of subsidies is the greater supply of goods. Due to lowered prices, a sudden increase in demand can be difficult for many producers to meet, resulting in a sudden rise in prices.

How does agriculture impact our lives?

For instance, we use agriculture to raise animals and grow food, such as tomatoes, carrots, meat and eggs. The importance of agriculture make us less dependent on other foreign countries, provides food and shelter and also provides us with income to the farmer and revenue to the government.

What are three reasons agriculture is important to humans?

Agriculture provides food, clothing, and shelter. It helps people to enjoy a higher quality of life.

What will happen when there is no farmers?

If there were no farmers or ranchers, there would be no one to cultivate crops for us. Agriculture would be badly affected and there will be massive price rise of commodities in the market. Moreover, situations like famine can arise due to the condition. hence, farmers or ranchers are very important to a country.

What happens if we eliminate crop insurance altogether?

Argumentating that it hinders farmers’ capacity to produce responsibly and fosters an unhealthy dependency, a campaign to abolish this enormous, complicated, and contentious system is gaining momentum in the United States. Consider the following scenario for a conceivable future, some years in the future: Areas that were formerly plowed up and planted with maize or wheat are now being returned to their natural state as native grass. Water quality downstream will improve when marginal, flood-prone land is allowed to recover to its natural state.

In today’s world, monocropping is no longer an option.

They make a tidy profit with relative ease.

Cattle are being turned out to pasture on land that was formerly used for intense farming in this futuristic tableau.

  1. It seems like there is always something growing in the soil that is helping to anchor nitrogen, hold rainfall, and sequester carbon.
  2. The following is a representation of what farmers, environmentalists, and economics believe American agriculture may look like in the future.
  3. Crop insurance covers more than 300 million acres of crops in the United States, according to the USDA.
  4. Agricultural insurance protects farmers against production and income losses caused by natural calamities, such as droughts, flooding, pests, and disease—as well as market volatility.
  5. The federal government—and, ultimately, the taxpayer—contributes more than 60% of the premium, with farmers covering an average of less than 40% of the cost of coverage on their own.
  6. However, there have been some unforeseen repercussions, for the most part.
  7. In other words, practices that may shield farmers against the same losses that they end up relying on crop insurance to repay are being sought.

Recently, I wrote about a time-consuming and expensive effort to develop crop insurance products that would reward farmers for adopting regenerative agriculture practices that are restorative, maintain natural systems, and rebuild topsoil, thereby protecting land against the inevitable ravages of climate change.

  • Not long after my post was published, someone came up in my Twitter mentions to make a case for what would be the most revolutionary reform of all: the repeal of the death penalty.
  • *** I followed up with several of the farmers who had reached out to me, asking them why they would want to do rid of crop insurance and what they thought the world would be like without it.
  • Scott Dudek cultivates open-pollinated seed corn on 120 acres in Michigan, less than 15 minutes from the Canadian border.
  • According to Dudek, “I would want to see the subsidy portion of it taken out.” “It should be allowed to become a wholly private product.” The reliance on crop insurance, in his opinion, is far too great among farmers.
  • In addition to his libertarian beliefs and affinity for limited government, Dudek believes that eliminating the crop insurance subsidies totally will compel farmers to embrace more conservation methods, which he believes would force farmers to adopt more conservation practices.
  • Despite the fact that there are a variety of incentive schemes in place at the state and federal levels to encourage farmers to start producing cover crops, they have not resulted in broad adoption.
  • Crop insurance is a source of contention for a wide range of people.

Among the provisions singled out by the study is the Actual Production History Yield Exclusion, which was included in the 2014 farm bill and is compounding the problems that crop insurance was designed to address.

That is changed by the yield exclusion, which allows farmers in some counties to eliminate negative years from their production estimates.

For the most part, this implies that farmers may rewrite history and claim that the terrain is not as dry or unsuitable for growing crops as it actually is.

“There was a time when, as long as you planted maize, you were promised a profit,” says the author.

High crop insurance payouts dissuade farmers from adjusting to climate change, which might result in another man-made environmental calamity similar to that of the Dust Bowl.

In order to get farmers to plant more risky crops or bring more risky acres into production, Schechinger explains that crop insurance subsidies must be provided by the government.

That may appear benign at first glance, but Schechinger points out that maize is frequently planted in place of winter wheat, which helps to keep the soil in place during the colder months of the year.

According to Schechinger, marginal land, or land that is susceptible to drought or flooding, is more likely to be put into production as a result of government-subsidized crop insurance.

This has negative repercussions for the environment: In addition to soil erosion and nutrient runoff, which are caused by the land’s susceptibility to drought and floods, they can have major implications downstream, resulting in toxic algal blooms in all sorts of water bodies and hypoxic dead zones in the ocean.

  • Although Steinlage used to cultivate nearly exclusively corn, he now plants corn, soybeans, buckwheat, rye, barley, and sunflowers, or “a little bit of everything,” according to Steinlage.
  • Sandra Kay Miller, who runs a 75-acre farm in Pennsylvania where she breeds meat goats, lambs, and poultry, has also had difficulties.
  • “I have witnessed so many abuses of the crop insurance program over the course of the last 20 years,” Miller adds.
  • After that, the acres flood year after year, and the crop insurance adjuster appears year after year to assess the damage.
  • However, according to Seth Watkins, enforcement of such restrictions is almost non-existent.
  • Watkins comes from a farming family that has been in the business for four generations.
  • He also plants a combination of alfalfa, hay, oats, and maize for silage on his property.

The thought of this happening worried him so deeply that he just transferred ownership of his land to a conservation trust to ensure that it never happens again.

The food chain in the United States is “quite intricate,” Watkins explains.

One of the things that disturbs me about government crop insurance is that it provides an incentive to grow land that shouldn’t be farmed.” Crop insurance would be eliminated, which would encourage every producer to be more innovative and cautious in their operations.

There are environmental groups on one side of the debate that are asking for considerable revisions to the federal program.

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On the other hand, conservative think tanks such as the Heritage Foundation and the Cato Institute have advocated for the complete abolition of the practice (or, barring that possibility, significant reforms).

Chris Edwards, head of tax policy research at Cato Institute, argued in 2018 that the federal government’s “coddling” of the farm business was “deep and thorough.” “Farm subsidies are not only expensive for taxpayers, but they also have a negative impact on the economy and the environment.” Crop insurance critics claim that farmers are not incentivised to adopt regenerative agriculture methods as a result of the policy.

The challenges identified by conservative think tanks are those that might just as well be championed by progressive groups as they are by conservative organizations.

According to Edwards, the average income of farm households in 2016 was 42 percent more than the average income of the ordinary American household.

As noted in the Heritage report, “reviews of agricultural programs have repeatedly found tens of millions of dollars in agricultural subsidies annually going to residents of such agriculture powerhouses as New York City and Washington, D.C.” In addition, the bulk of crop insurance payouts go to producers of cash crops, such as soybeans, rather than to farmers of fruits and vegetables, or to persons who exemplify the very definition of “farmer.” Crop insurance would be eliminated, which would encourage every producer to be more innovative and cautious in their operations.

  1. Suddenly, they would be responsible for managing all of the risks associated with farming.
  2. Managing business risk is not unique to farming, and other business owners and operators have learned to do it as well, according to him.
  3. If the government-sponsored program were to be phased out, private insurance firms would be compelled to provide a variety of crop insurance plans from which farmers could pick.
  4. In order to supplement their farming income, more farmers may look for secondary or part-time employment (again many, like Dudek, already do).
  5. According to the Heritage Foundation, crop insurance artificially inflates the value of land, which can make it even more difficult for new and beginner farmers to break into the profession.
  6. Subsidies such as crop insurance have artificially depressed the prices of corn, soybeans, and other grains, which are used by concentrated animal feeding operations (CAFOs) to produce inexpensive meat on a large scale at a low cost.
  7. If crop insurance was not available, fewer farmers would plant those crops.

The acres that are unsuitable for crop production may be converted into cattle rangeland in the future.

Wouldn’t it be interesting to see what our communities would look like if we truly embraced environmentally friendly, carbon-conscious farming practices?

Well-managed pastures with something growing in them all of the time help to retain soil, water, and nutrients, hence reducing runoff that damages water quality in the surrounding area.

Crop insurance has not always been available in the manner that it is presently.

Despite this, the crop insurance program has proven to be far more expensive for taxpayers, according to the Heritage Foundation, which estimates that it has been six times more expensive.

Farmers could be protected from unforeseeable circumstances by reverting to an ad hoc disaster relief program, which would distribute funds only in the event of truly catastrophic natural disasters.

Having said that, there are enormous, entrenched interests in ensuring that crop insurance continues to exist.

(They are represented by a trade association that asserts that crop insurance is vital for farmers to have.) Government subsidies the cost of crop insurance administration for private insurance companies, and the government guarantees them a rate of return that is far higher than what they might anticipate on the free market.

Furthermore, the industry does not hesitate to lobby and spend lavishly in order to convince politicians that crop insurance is necessary.

However, a large number of people believe that the existing system is unsustainable in terms of both financial and environmental sustainability.

“If we take a 10- or 20-year view, can you imagine what our communities would be like if we truly embraced ecologically sound, carbon-smart farming practices?” says the author.

In addition to the New York Times and National Geographic, her work has also appeared in Backpacker magazine and Grist magazine. She also publishes a newsletter under the name Pinch of Dirt. Get a weekly serving of stories, analysis, and insight from those on the front lines of the food movement.

How Farm Subsidies Affect You

Farm subsidies are financial advantages provided by the government to a certain industry, in this instance the agriculture sector. This type of assistance helps farmers mitigate risks associated with the weather, commodity brokers, and supply and demand interruptions. However, as they have evolved, they have gotten extremely complicated. Because of this, farm subsidies are available to just a select few major farmers. Only five crops are subsidized by the government out of the total number of crops grown by farmers.

  • Grains supply 80 percent of the caloric requirements of the planet.
  • Texas, Nebraska, Kansas, Arkansas, and Illinois are the top five states that get subsidies, followed by Nebraska, Kansas, and Illinois.
  • Peanuts, sorghum, and mohair are among the crops that receive lesser subsidies.
  • Between 1995 and 2017, a total of $369.7 billion was distributed.

Summary of the U.S. Farm Industry

In 2017, the combined agricultural and food business contributed 5.4 percent to the overall GDP of the United States. It accounted for 11 percent of all employees. Farming generated 1 percent to the gross domestic product and employed 1.3 percent of the workforce in the United States. Corn is the most important crop in the United States. In 2017, more over 15 billion bushels of corn were harvested, with 15 percent of that crop being exported. Indiana, Illinois, Iowa, Missouri, Nebraska, and Kansas are considered to be part of the corn belt.

  • California is the state that generates the most food in terms of dollar value.
  • These are not subsidized in any way.
  • Understanding the soil characteristics and weather patterns in a given area provides a distinct competitive edge.
  • Large farms, defined as those with an annual income of $1 million or more, account for around 3 percent of all farms.
  • The majority of farms specialize in a single crop.
  • Pros
  • Subsidies help to ensure that the nation’s food supply remains secure. Farms are vulnerable to viruses, illnesses, and extreme weather conditions. Subsidies assist farmers in adjusting to fluctuations in commodity prices. Farmers are reliant on loans, which makes their company a bit of a risk.
  • Farms in the United States are located in one of the world’s most ideal geographical locations
  • They benefit from the technological advances of a contemporary company
  • Farmers in the top ten percent of the income distribution got 78 percent of the subsidies. Farm subsidies are a hindrance to the implementation of international trade agreements.

Pros

Extreme weather events such as droughts, tornadoes, and hurricanes must be protected in order for America’s food supply to remain safe. During wars, recessions, and other economic crises, the government has an important role to play in maintaining food production. The production of food is more vital to the nation’s well-being than the production of other commercial items. Farms are particularly vulnerable to drops in commodity prices. Commodity traders decide the pricing of commodities traded on an open market.

  1. Farmers might take their chances on what the market will bear when it comes time to harvest their crops.
  2. Regardless, they are placing their wager on the fact that their costs will be lower than their future revenues.
  3. dollars, the value of the dollar will have an impact on the amount of money that farmers get.
  4. Pathogens, illnesses, and extreme weather conditions can cause crop and animal death.
  5. Because to the outbreak of avian influenza in 2015, egg prices increased by 17.8 percent.
  6. Loans are essential for farmers.

This gives the impression that farming is a game of chance. Even a one-time expenditure or several years of low pricing might be financially devastating. Farms are unable to relocate. If a local processor cancels their contracts or becomes bankrupt, they may be forced to stop their operations.

Cons

Farms in the United States are located in one of the most advantageous geographic zones on the planet. Rich soil, plentiful rainfall, and access to rivers for irrigation when the rains don’t come are all advantages of this region. In addition, modern farms enjoy all of the benefits of running a contemporary business. They have highly qualified workers, sophisticated equipment, and cutting-edge chemical research in the fields of fertilizers and seeds on their side of the fence. Farm subsidies have the same effect as regressive taxes.

  • The vast majority of the funds are directed toward huge agricultural corporations.
  • The top one percent of the income distribution got 26 percent of the payouts.
  • Farm subsidies were obtained by 50 persons who were on the Forbes 400 list of the wealthiest Americans.
  • Farm subsidies in the United States impede international trade.
  • Tariffs between members of the World Trade Organization would have been removed under the Doha Round.

History

Agriculture has traditionally been a beneficiary of federal assistance. The vast majority of agriculture programs were established during the Great Depression. The following is a condensed history of the programs and their objectives.

  • 1862: The Homestead Act, passed in 1862, provided land in the western United States to people who were willing to farm the property. The Morrill Act of 1862 provided funding for agricultural institutions. Farmers were allowed to obtain loans from the government thanks to the Federal Farm Loan Act. During World War I, it was responsible for ensuring that there was enough food. The Farm Credit System was established in 1929 as a result of the Agricultural Marketing Act of 1929, which also established the Federal Farm Board. It attempted to prevent the collapse of crop prices. It requested farmers to reduce their agricultural production, but this did not succeed. It purchased and hoarded crops in order to limit supply. When President Franklin D. Roosevelt incorporated agriculture subsidies in his New Deal program in 1933, the Farm Credit Administration was established. They were originally established to assist farmers who had been devastated by the Dust Bowl and the Great Depression of 1929
  • The Agricultural Adjustment Act was put into law by Congress in 1933. Farmers were compensated for reducing crop yield. By 1937, agricultural prices had more than doubled. This legislation was struck down by the Supreme Court in 1936 because it taxed processors while providing subsidies to farmers. The Emergency Farm Mortgage Act gave loans to farmers to keep their farms from going into default
  • 1934: The Soil Conservation and Domestic Allotment Act provided payments to farmers who planted soil-building crops, such as beans and grasses, to fight dry conditions. Farmers were taught and farm debt payments were modified by the Resettlement Administration in 1935, thanks to the Rural Electrification Act, which offered loans to agricultural cooperatives to provide power for their rural regions. Ten million acres of marginal agriculture were purchased, and the landowners were compensated for converting it to pasture, preserves, or parks. As part of this effort, it relocated farmers to better land while also teaching them contemporary conservation and agricultural practices. 1937: The Farm Tenancy Act established the Farmers’ Home Corporation, which provided loans to tenant farmers who wanted to purchase their farms. The Farm Security Administration took over for the Resettlement Administration in order to give financing and training to farmers
  • 1938: The New Agricultural Adjustment Act corrected the problems caused by the 1933 Agricultural Adjustment Act. It was in place until the 1990s that this price support mechanism was in place. The federal government ensured that farmers would get a price that was high enough for them to stay profitable. What was the mechanism through which it accomplished this? It compensated farmers in order to ensure that the supply did not exceed the demand. In order to avoid overproduction, the government provided subsidies to farmers who chose to leave croplands fallow. It also purchased any surplus crops. Afterwards, it either preserved the items or distributed them to feed low-income individuals across the world.
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How Farm Subsidies Affect the Economy

Farmers may be encouraged to grow crops that aren’t drought-resistant because of the government crop insurance program, according to some experts. They are encouraged to grow the same crops year after year as a result of the insurance policy, regardless of crop production. The inability to move to drought-resistant crops as a result is a barrier to their success. The drought in the Midwest is exacerbated as a result. Between 2006 and 2015, the Midwest had a prolonged period of drought. Drought is anticipated to worsen as a result of global warming.

  1. Farmers are being forced to drain groundwater from the Ogallala Aquifer at a rate that is eight times quicker than the rate at which rain is replenishing it as a result of the drought.
  2. It provides 30 percent of the irrigation water used in the United States.
  3. According to scientists, it would take 6,000 years for rain to completely refill the aquifer.
  4. Another type of subsidy encourages farmers to cultivate maize for the production of ethanol biofuel.
  5. This results in an additional 120 billion gallons of water being drained from the aquifer each year.

It is exported to China, where it is transformed into the low-cost clothes that is sold in American retail stores. Food stamp financing is included in farm subsidy legislation. As a result, urban members of Congress are more likely to support farm subsidy legislation.

How Farm Subsidies Affect You

Grains are the most highly subsidized, making them significantly less expensive than vegetables and fruits in many countries. Consequently, grains account for one-fourth of the average American’s caloric intake. Another quarter of the total came from oil derived from maize, soybeans, and canola. Fruits and vegetables account up less than 10% of the total. A total of more than 6 percent of farm subsidies are allocated to four “junk food” ingredients: corn syrup, high-fructose sugar, corn starch, and soy oils, among others.

Farm subsidies are common in most developed nations.

In order to diminish this advantage, the World Trade Organization restricts the quantity of subsidized grains that nations may add to global stockpiles in order to reduce this advantage.

As a result, the volatility of food prices rises.

Harmful or Helpful? – The College of Liberal Arts at Texas A&M University

The date is November 3, 2021.

Farm Subsidies: Harmful or Helpful?

Since the Great Depression, the United States government has provided subsidies for grain and livestock production. But is this still essential today? Tiarra Drisker ’25 contributed to this article. Farm subsidies were established by the United States government during the Great Depression to compensate for a surplus of crops and low prices for both crops and animals. Despite the fact that the Great Depression came to an end about a century ago, subsidized farming continues. Farmers now account for fewer than one percent of the population of the United States.

  1. The government provides subsidies to farmers that account for one-fifth of total farm revenue.
  2. Agricultural subsidies, according to Dennis Jansen, a professor at the Department of Economics, are part of a larger problem: crony capitalist behavior.
  3. As Jansen’s definition of crony capitalism reveals, there are a variety of additional supported activities taking place in the United States economy.
  4. All subsidized activities are established with the goal of providing financial assistance to the economy; nevertheless, agricultural subsidies may have the opposite effect.
  5. “Take, for example, peanuts.
  6. This means that we will have to tax everyone in order to provide farmers with a subsidy in addition to what their peanuts sell for on the market.
  7. Putting an end to the subsidies would result in lower taxes for taxpayers, but it would result in the loss of financial security for farmers and ranchers.

“For example, because the government-guaranteed price for peanuts is higher than the free market price, producers would get a lesser payment if the guarantee were not in place.” The ways in which farming subsidies might be utilized by politicians to garner more votes in places where farming is the primary source of income are discussed in a blog post written with his colleagues Liqun Liu and Andrew Rettenmaier.

In Jansen’s words, “farm subsidies are concentrated among a limited number of farmers.” While this is going on, the expense of these subsidies is being dispersed across a very wide number of non-farmers.” Agricultural producers have a strong motivation to devote significant time and resources to influencing legislation that would safeguard or sustain their subsidies.

Politicians frequently believe that removing subsidized agriculture will result in greater losses than maintaining it.

According to Jansen, “governments are never at a lack for ideas on how to spend money.” “And, we could just decide not to spend the money, decrease taxes, or borrow as much as we now do.”

Subsidies prevent farmers from reaching their full potential

Farmers and low-income people in the United States are naturally concerned about the recent expiration of the Farm Bill, despite the fact that the approval of a new version of the legislation is all but inevitable. Regardless, we should pause for a minute to consider what would happen if we eliminated agricultural subsidies from the Farm Bill instead. The concept may appear fantastical at first. Farm subsidies have been in place for more than 80 years, and it’s difficult to imagine an agriculture business that is not heavily influenced by the government.

  1. In the 1950s, New Zealand’s per-capita income was second only to that of the United States; yet, less than 30 years later, it had sunk to 27th place in the world, on level with that of Portugal and Turkey.
  2. New Zealand ambassadors were forced to use personal credit cards to pay for official costs as a result of a government budget crisis that erupted in the country.
  3. The transition wasn’t without controversy and hardship; subsidies accounted for almost 45 percent of the gross revenue of sheep and cattle producers, the nation’s largest agricultural business, at the time of the transition.
  4. “I still have bruises and lumps on my body as a reminder of it.” Despite the difficulties encountered in the near term, removing farm subsidies and trade barriers has shown to be a wise option in the long run.
  5. According to McTigue, in 1984, the primary output of New Zealand sheep producers — lamb — was selling for $12.50 a kilogramme on the worldwide market.
  6. They were able to reach this target by 1989 because to technological advancements in the production of higher-quality meat, improved processing, and a revitalized market emphasis.
  7. Five years later, the market price for New Zealand lamb had risen to $115 per kg, a significant increase.

This enabled them to compete in international markets, and now, New Zealand wines can be found in many grocery shops around the United States.

There are now over 670 of them.

Over the next ten years, the number of diverse items targeted to niche markets climbed to 2,200 separate products.

A customer-focused credo, “Consumers purchase with their eyes,” resulted in the development of new apple varieties and the development of a reputation for producing some of the best-tasting apples and pears in the world, among other things.

New Zealand’s agricultural renaissance was triggered by the removal of the hurdles to competition that had been erected by subsidies, trade barriers, price controls, and other restrictions in the previous century.

However, in the long run, they encourage producers to maintain the status quo rather than focusing on the ultimate source of their prosperity: their consumers.

Farmers in New Zealand took advantage of this opportunity to differentiate their goods and charge greater prices as a consequence.

Farmers in the United States may be reluctant to accept it, but the Farm Bill is essentially a welfare bill, providing food stamps for low-income families as well as subsidies for farmers.

Those conservatives who are concerned that welfare programs encourage reliance and lock poor people in a cycle of poverty should apply the same level of reasoning and scrutiny to the Farm Bill, which accomplishes just that for farmers.

Passing another farm bill will only serve to perpetuate the agricultural dysfunction against which we have been fighting for more than eight decades.

Michael Farrenis is a research fellow at George Mason University’s Mercatus Center, where he studies public policy.

Secret Subsidies: Payments to farms allowed to stretch far beyond rural America, sowing concern about who gets what

(InvestigateTV) – In this episode of InvestigateTV, we talk about how to get started. The United States government distributes billions of dollars in public funds to the country’s farmers each year to assist in keeping agriculture viable when times are bad. However, the federal government is sending millions of dollars in subsidy payments in the names of people who live and work hundreds of miles away from the farms that are receiving the money from the state and federal governments. Even though they are meant to be actively involved in the farm’s operations, it is unclear how or if this is the case in actuality.

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As soon as journalists began requesting further public papers, the USDA withdrew its willingness to provide them.

Farmed Out

Farming is an inherently dangerous enterprise — and this is true not only because of the physical work and large pieces of heavy gear involved. Farmers confront a variety of challenges each year, including weather, illnesses, and pests, as well as the unpredictability of the market for their crops or cattle. In one year, you make money,” says the author. You’ll be out of money for three years. “Then you make a profit the next year,” explained Darvin Bentlage, a fourth-generation Missouri farmer.

Because the programs are based on acreage, farms can apply for funding on behalf of anyone who is “actively engaged” in the farm’s operations — the fact that there are more people involved means the farm gets more money — on top of a system that already favors larger farms due to the way it is structured.

The papers obtained by InvestigateTV from the USDA list the participants of agricultural partnerships, as well as the amounts of money they received from 2016 through 2018.

Along with the luxury suite coordinator and designer, the group included an attorney for an engineering firm based in New York City, an energy executive in New York City, a brand creative director in Florida, and a judge who lives hundreds of miles away from the farm with which she is affiliated, among others.

The money is not going to someone who is farming and who is in desperate need of the money to keep their farm viable, as is the situation in many cases.

Schechinger expressed amazement that InvestigateTV was able to gather information about the participants of the collaboration in the first place.

“Because this is government money, we should be able to identify the participants of these partnerships,” she stated. From politicians to farmers, the issue of who receives subsidies and how much they receive is a source of controversy for everyone involved.

A Lifeline with a Disparity

He was ten years old when Darvin Bentlage had his first ride on the back of a tractor. In Golden City, Missouri, he followed in the footsteps of his father, grandpa, and great-grandfather, who had all raised cattle and farmed vegetables there before him. Darvin Bentlage is a fourth-generation farmer in the state of Missouri. (InvestigateTV) “It’s in your blood,” he stated emphatically. “It’s not a job,” says the author. It is not a professional occupation. “It’s a part of who you are.” In addition to his work with organizations such as the National Family Farm Coalition, Bentlage says farm subsidies such as the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs have been a lifeline for farmers like himself over the last several years.

  1. For the past couple of years, it has accounted for 40% of our income.
  2. According to the USDA and the Congressional Research Service, the total amount of ARC and PLC payments received annually between 2014 and 2018 averaged $5.2 billion per year, with the USDA and the Congressional Research Service anticipating that figure to rise through 2023.
  3. According to him, the previous six years have been “very hard,” and “we obtained prices that are below the cost of manufacturing,” he explained.
  4. Money is awarded mostly on the basis of acreage and market circumstances for each crop, and there are limits to the amount of money that may be awarded to any individual.
  5. “The subsidy program has always been set up in a fair way, in my opinion, because it is mostly based on acres,” Serio stated.
  6. The tiny farmers, she explained, are “truly the ones that don’t have assets to fall back on when things are tough.” In lean times, large farms have a lot of cash on hand, and they have a lot of land to fall back on.
  7. Farm subsidies, according to Darvin Bentlage, have been a lifeline for his family over the previous five years.
  8. “The tiny folks are unable to compete,” he remarked, adding that, in his opinion, the problem extends beyond land costs.

“As a result, they get the majority of the money.” “On top of that, they’re the ones that don’t need it.” Farmers can evade program restrictions — such as the $125,000 annual cap for the Agriculture Risk Coverage and Price Loss Coverage programs, for example — by working in collaboration with other farmers.

Partners

The USDA defines “active engagement” as someone who contributes capital, land, equipment, active personal labor, or active personal management to the farm’s work in order to be eligible for subsidy programs. To be eligible for subsidy programs, partnership members must be “actively engaged” in the farm’s work. The USDA’s subsidy data does not specify how partnership members are linked to a farm — and in other situations, listed members may not be aware of their own identity. The Investigative Television Network (InvestigativeTV) wrote letters to eight farms and partnerships as well as 17 partnership members who received large amounts of subsidies from 2016 to 2018 but whose addresses and jobs raised problems in 2016.

Robert Serio is the farm’s attorney, as InvestigateTV discovered after conducting its initial interview with him.

A representative from the farm, speaking independently to InvestigateTV, said she was not aware her name was tied with more than $130,000 in subsidies and that she was uninformed of the situation.

On being contacted by The Associated Press about the situation, Serio stated that he was not surprised because spouses are eligible to apply for subsidies if the other spouse is “actively engaged,” which in this case meant that the husband was working on the farm as well as being a member of a corporation that had invested in the farm at the time.

  • Documents from the USDA that have been redacted reveal an application for different agriculture subsidies.
  • (USDA image courtesy of InvestigateTV) Even though some of the information in the USDA documents has been obscured, it appears to reveal proof of one individual signing subsidized contracts for numerous partners on another farm, including some who are described as wives.
  • For Kristen Brantley’s services as a luxury suite coordinator for the Dallas Cowboys, Brantley Farming Company in England, Arkansas, received a total of $337,347 over a three-year period.
  • These businesses, which were primarily Limited Liability Corporations, served as a vital link between other persons and farms.
  • According to EWG’s Schechinger, these kind of shareholder links are where things turn fuzzy because there is essentially no minimum amount of agricultural work that must be provided in order to be considered for inclusion.

In such case, you may just phone a few shareholders once a year or visit the property once every few years. And that, together with the ownership of a small portion of a farm, is sufficient to qualify for these payments.”

Scrutiny

Attorney Serio, of the state of Arkansas, stated that he does not see any problems with the present partnership arrangement. In his words, “Partnerships may be qualified to receive farm program payments if at least one of the partners is actively engaged in farming.” “So it’s not simply that there aren’t any people out there.” It is the partners who are actively involved in the farming business.” He believes that these partnerships are working within the law, based on the instances of farm subsidy payments that InvestigateTV provided to him.

Throughout his career, attorney Robert Serio has represented hundreds of farms and other agricultural clients, among other things.

It was true in the past, and I’m talking about 20, 25 years ago, that there were individuals doing it,” he explained, “but the majority of those individuals were not in partnerships.” This is because the government has investigated partnerships in the past.” A public uproar over the eligibility of people receiving agricultural subsidies led to the enactment of the Farm Program Payments Integrity Act, which established the “actively engaged” criteria in the late 1980s and is still in effect today.

In order to be successful, Serio believes that you must have some component of farming.

However, according to Schechinger, the criteria of staying within the confines of the law still give a lot of space for interpretation.

“That’s exactly how we see these folks in cities receiving their payouts,” says the author.

“Congressmen are fully aware that this occurs and that there are things that can be done to prevent it, but they are not taking the necessary steps to prevent it,” she stated.

Chuck Grassley, who is a member of the Committee on Agriculture, Nutrition, and Forestry and is concerned about the situation in 2020.

“If Iowans hear me suggest a maximum of $250,000, they’re likely to think, ‘Wow, that seems like a significant subsidy,’ but you’re trying to find a middle ground between those who want the ceiling to be $2 million and those who want it to be $50,000,” says the governor.

The 2018 Farm Bill was passed by the United States Senate on June 28th of this year.

(U.S.

According to him, “this is more or less a lighthearted response,” but “everyone who is receiving this assistance should have dirt under their fingernails.” Darvin Bentlage, a farmer from Missouri, had the same sentiments as the author.

“They start recruiting people to join the partnership who have no idea what’s going on out there,” says the narrator.

In his words, “we’ve had as many farmers go bankrupt as we did during the agricultural crisis of the 1980s,” which was marked by record crop price declines and a trade war with the Soviet Union, which resulted in a huge number of farm foreclosures in the United States.

In fiscal year 2020, 589 farms sought bankruptcy protection, an increase from 459 in fiscal year 2016.

He went on to say that he has already seen it have an impact on the next generation of farmers.

“I’d want to see more involvement from young people, but how can they do that?” Mary Claire Molloy and Adam Stockholm contributed to this study, which also included contributions from Esme Middaugh, Vivek Rao, Lucy West, Rachel Hammes, Kyra Miller, Michael Skiles, Sammi Bilitz, Taylor Killough, and Brianna Lanham, who assisted with research.

All of them are from Indiana University’s Arnolt Center for Investigative Journalism, which is a partner of InvestigateTV’s mission. Gray Media Group, Inc. has copyright protection through the year 2021. All intellectual property rights are retained.

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