The Scale of Farm Program Benefits

There’s a lot of talk these days about farm bill equity in relation to scale. Many advocates call for adjusting farm program benefits according to scale, to give more benefits to smaller “farms” and less to larger farms, especially if they grow only corn and soybeans, for example, in the corn belt. This paper teaches an answer to some of these issues. It’s really quite interesting. I also have a slide show that examines more of the issues. 

This paper uses some historical examples, some historical context. In part I’m thinking of the 1980s to early 90s when Republican Presidents Ronald Reagane was in office. The 1980s was also a time when Family Farm (Farm Justice Movement leaders made bold proposals to restore adequate updated versions of the earlier New Deal “parity” farm programs of 1942-1952. Populist Democrats in Congress turned these proposals into actual bills. These included the Farm Policy Reform Act, introduced in Congress as the Harkin-Alexander bill,https://familyfarmjustice.me/2016/12/10/the-farm-policy-reform-act-of-1985/ and the Family Farm Act of 1997, introduced in Congress as the Harkin-Gephardt bill. https://familyfarmjustice.me/2016/12/09/family-farm-act-of-1987/

I’m also thinking in terms of the Environmental Working Group’s (EWG) Farm Subsidy Database, which started in 1995. https://farm.ewg.org/region.php?fips=00000&regionname=theUnitedStates Based upon EWG data, I did some data analysis of farm subsidy recipients for the years 1995 to 2010. This paper is partly based upon that earlier work. https://znetwork.org/zblogs/most-ewg-subsidy-recipients-are-too-tiny-to-be-farmers-by-brad-wilson/ EWG’s approach has had massive influence in America, where hundreds of newspaper and other editorials supported it. https://familyfarmjustice.me/2018/04/27/mainstream-media-misunderstands-the-farm-bill/ It may also have had an influence in Europe, where similar analysis has been presented.  http://znetwork.org/zblogs/farm-subsidies-rebutting-europe-s-kickaas-by-brad-wilson

Stimulated by the work of EWG, in the 21^st century there has been a major rise of a Food Movement, an Environmental Movement that focuses on the farm bill, and related sectors and subsectors. At times they have emphasized, for example, comparisons between EWG’s top 10% of farm subsidy recipients, those who have received the most money, and those farther down on the list. The contrasts are quite shocking, (until you read my analysis of the data, as linked above, and see my slide show, Politics, Farm Size and Agribusiness, also linked above). As I showed in the link above, this is a myth, and it is also a major context for this paper.

Who Really Favors Growing Less Corn and Soybeans?

Ok, let’s look at some different farm sizes, subsidies, and proposals to grow less corn and soybeans. Here are the average yearly subsidies for corn and soybeans as seen in the Farm Subsidy Database for 1995-2010. 

Starting in the middle at the 50% mark, (top 50% or bottom 50% mark,) are the recipients who got subsidies, on average, as shown. Moving up to other top percentage marks in the Farm Subsidy Database we see these amounts.

% Down from the top Average per year, 1995-2010.

50% $288

33% $948

10% $8,770

5.5% $17,282

3.4% $25,294

1% $52,168

0.14% $125,000

Naturally, it has seemed unfair for so many people that some “farms” (recipients,) got so much more than others. So they’ve called for giving less at the top, and more and the bottom.

There is more to the story, however. Earlier farm programs had Supply Reduction, (acreage “set aside,”) requirements. For example, the 1990 farm bill required a 10% reduction of corn acreage for 1995. (That was ended by the Republican Congress in the 1996 farm bill.) Here’s what that would mean for the farms (& “farms”) in this example.

% Down from the top  Average Reduction per year, 1995-2010.

50% 0.3 acres

33% 1 acre

10% 10 acres

5.5% 20 acres

3.4% 30 acres

1% 60 acres

0.14% 145 acres

Here’s a comparison for anyone concerned about the impacts of corn and soybeans, for example, with regard to it’s impact on water quality. Here we look at WHO proposes legislation where corn and soybean acres are reduced.

We see, then, that even the Republicans, (prior to 1996,) called for reductions in corn acres, (with the biggest reductions for the biggest farms, while the progressive Food and Environmental Movements, (including the Environmental Working Group,) propose no legislataion that reduces corn and soybean acres, even for the biggest farms! Likewise, the Sustainable Agriculture/Organic Movement sectors, (including groups like the National Sustainable Agriculture Coalition,) proposes no reductions in corn and soybean acres. On the other hand, the Family Farm (Farm Justice) Movement, (in this example from the 1980s, and representing most farmers, has proposed even larger reductions, for both corn and soybeans. (Today there are more moderate proposals from the National Family Farm Coalition, National Farmers Union, Texas Farmers Union, and Campaign for Family Farms and the Environment. WHY do you suppose the Food/Environmental/Etc. Farm bill advocates propose no reductions in corn and soybean acres, even for the largest farms, while even the Republicans have done so in the past?

Well, I think the answer is quite simple. These newer advocates really don’t at all listen to the Farm Justice Movement that represents most family farmers. Therefore they don’t know the history of the farm bill, and they don’t know what the proposals of the Family Farm Movement have been, or even that they have ever had proposals. And therefore, they don’t really even know that there have ever been farm bill requirements to reduce corn and soybean and other acreages, (i.e. wheat, cotton, rice, grain sorghum, barley,) or proposals to increase the reductions.

Another Example, Based Upon My Previous Work

Here’s another example four farms (& “farms”*) of differing sizes growing corn, soybeans and oats based upon this slideshow. https://drive.google.com/file/d/1MeAFcvknpJJ86xW00OJM2iX1qvbPy2nP/view?usp=share_link Full cost numbers are full economic costs or the equivalent, as measured by USDA’s Economic Research Service. 1980-2005.

Corn Only

Average 1961-1995  1980-2005 1980-2005 1980-2005

Per Year Reduced Acres Full Costs Market Net Subsidies

A. Smallest 0.4 acres ($943) ($72) $105

B. Still small 4 acres ($9,427) ($720) $1,052

C. Larger 38 acres ($94,267) ($7,200) $10,520

D. Largest 379 acres ($941,671) ($72,003) $105,200

Here we again see that the actual farm bill had reduced acres for corn, (and other crops, but not including soybeans,) and required the largest farm to have the largest reduction in corn acres. At the same time, the largest farm received the most subsidies. The largest farm also had the largest costs, (full economic costs,) costs of nearly a million dollars in this example. In contrast, the smallest “farm”* had costs of less than $1,000. Should the “farm”* with less than $1,000 in costs get many more subsidies, like the largest farm, with costs of nearly a million dollars? That’s what many have argued and proposed. Of course, they don’t know about the rest of the story, part of which I’m showing here, and see further the slide show and article linked above, which goes into more detail. 

*Appendix: Farm Sizes in the Examples

Here are the farm (or “farm”*) sizes in the first example. They were calculated based upon average subsidies per acre.

% Down from the top  Acres of Corn and Soybeans

50% 7

33% 22

10% 203

5.5% 400

3.4% 600

1% 1,208

0.14% 2,893

If you were growing corn and soybeans during these years, 1995-2010, you would not be a full-time farm at the small sizes, even at 203 acres and more in the top 10%. Of course, none of the critics have done the math on this. They haven’t known that they were asking for part-time farms and tiny acreages to get the same subsidies as full-time farms. 

Here are the farm (or “farm”*) sizes in the second example. They were chosen by me to illustrate my points.

Average  1980-2005

Per Year  Size

A. Smallest 3 acres

B. Still small 30 acres 

C. Larger 300 acres

D. Largest 3,000 acres

Here again, the smaller farms are not big enough to be a full-time family-sized farm. Is a 300 acre farm growing just corn and soybeans big enough to be full time, with $3,320 in net returns, (including $87,067 in gross market income, a loss of $7,200 in market income (and $10,520 in subsidies,) after full economic costs are subtracted?

EWG uses the term “recipients” for those receiving subsidies in the Farm Subsidy Database. Others translate that into “farms,” without regard for, or without knowing, that most recipients are too small, usually far too small, to be full-time farms.