The 2002 Farm Bill: One Small Step for Family Farmers, One Giant Leap towards Corporate Production in Iowa

I. INTRODUCTION What role should the federal government play in financing the American farmer? Since the 1930s, the U.S. government has doled out billions of dollars in the form of subsidy payments to producers of various agricultural commodities.1 Such policies may have made sense in the 1930s, since twenty-five percent of the population relied on farming as their primary source of income.2 By contrast, only about two percent of the U.S. population currently engages in this occupation.3 Hoping to remove government support from this portion of the population, Congress enacted The Federal Agriculture Improvement and Reform Act of 19964 ("FAIR").5 FAIR departed from traditional forms of government subsidy programs by primarily basing payments to farmers on the quantity of a given commodity the grower produces.6 The Act left the secretary of Agriculture with no mechanism to control the amount of a given commodity that a farmer can produce. Congress continued these policies by passing the Farm security and Rural Investment Act of 20027 (the "Farm Bill"). The Farm Bill gives billions of dollars to support farmers as commodity prices continue to plummet.8 Why did the legislature abandon its goal of creating independent American agricultural producers? Instead of weaning farmers from government subsidies, the new policies provide large-scale agricultural producers with a disproportionate share of subsidy payments, stimulate overproduction thereby deflating market prices, and inflate the value of farmland.9 These conditions encourage farmers to incorporate their respective enterprises to gain several advantages associated with such ownership. Some advantages associated with incorporating a farming operation include obtaining limited liability and increasing amounts of available capital.10 In contrast, the Iowa legislature made an effort to discourage corporate ownership of agricultural land by passing the Anticorporate Farm statute.11 This statute generally prevents corporations from owning agricultural land.12 Iowa lawmakers demonstrated their desire to protect the traditional family farmer from direct competition with corporate entities in passing such legislation.13 However, the Iowa Anticorporate Farm statute provides exceptions that allow certain individuals to form corporations authorized to own farmland.14 What is the relationship between Iowa's Anticorporate Farm statute and the Farm Bill? Are traditional family farmers in danger of being forced out of business by federal legislation that favors corporate ownership? This Note explores these questions and the implications of recent federal farm policies for farmers in Iowa. Part II examines the history of farm subsidy programs in the United States. Part III explains the relevant sections of the Iowa Anticorporate Farm statute. Part IV explores how recent federal farm policies create disproportionate benefits for larger farmers while conflicting with the purpose of the Iowa Anticorporate Farm statute. Part V suggests some revisions for both the Farm Bill and the Iowa Anticorporate Farm statute that will protect the traditional family farmer. Finally, Part VI concludes that the state and federal legislatures must make changes in current agricultural policies if they truly wish to provide adequate protection for farmers in the United States. II. THE HISTORY OF FARM SUBSIDY PROGRAMS IN THE UNITED STATES A. The Early Years of Farm Subsidies: 1933 to 1995 Although American farmers flourished in the golden era between 1909 and 1914, agriculture entered the depression in 1920, nine years before the rest of the American economy.15 Farmers suffered greatly as a result of poor prices and production during this Dust Bowl era.16 The United States Government realized the need to actively involve itself in influencing farm commodity prices at the height of the depression.17 Without such intervention, the future of American agriculture appeared bleak. …