Subsidies and Regulation Hurt Small Farms
By: Satya Johnson
Tags: Small Farming, Regulation, Farm Subsidies, Beaurocracy, Big Government

Our small farms are good for the world. They provide fresh, healthy food to their communities, they are responsible and caring stewards of their land, and their regenerative farming practices are more friendly to the environment than the practices of large farms growing corn or soy as monocrops with nitrogen fertilizer. But small farms are inherently less profitable than larger ones: the economy of scale means that growing thousands of bushels of corn is far more efficient than growing a few dozen acres of diverse vegetables. Thus, the owner of a small farm hoping to make a profit off of their hard work cannot charge the low food prices that big farms are able to offer and will become outcompeted without extra support from the community. The government could be a strong force to counter this inequity in order to promote the existence of successful small farms in the U.S., but instead its farm subsidies and regulations magnify the advantages of large farms and inhibit smaller ones.

The help the government does give to farmers goes disproportionally to large farms. In 2018, President Trump signed a bill renewing a $867 billion farm subsidy plan, giving the USDA money to renew its over 80 year old tradition of, among other things, allowing growers to apply for subsidies awarded based on production. These subsidies guarantee growers a minimum revenue per bushel of “program crops,” a term which the USDA Economic Research Service’s 2019 report on America’s farms describes as including “barley, corn, dry edible beans/peas/lentils, oats, peanuts, rice, sorghum (grain), soybeans and other oilseeds, canola, and wheat,” crops usually grown in monocultures and which small farmers are less likely to produce.

Since the money is allocated based on yield size without regard to the financial needs of the farm, it ends up supporting primarily huge agriculture companies which are already making large profit margins. According to the USDA’s 2019 report, 97.9% of U.S. farms are family farms, meaning that the “principal operator and people related to the principal operator…own a majority of the business.” The report shows that 69% of commodity-related payments went to the top 8.5% of these farms, and only 6% of the payments went to occupation farmers with gross cash farm income less than $150,000 (31.7% of U.S. farms fall into that category).

Millions of dollars of farm subsidy money doesn’t even end up going to real farms, but ends up in the hands of local governments, state universities, and even airports, according to data from the Environmental Working Group. The group’s report stated, for example, that between 1996 and 2001, the Walla Walla Regional Airport in Washington state received $67,222 of farm subsidy money. Some people who own land which used to be farmed for rice now get subsidies for their lawns, and historical societies receive tens of thousands of dollars of this money intended for farmers.

Many small farmers simply don’t have time or inclination to apply. The application process for farm subsidy money is necessarily bureaucratic, involving time-consuming paperwork, and while larger companies hire staff to do this kind of work, small farmers are busy doing the actual work of growing food. Moreover, receivers of subsidies have to grow their crops to government standards, using farming practices like antibiotics for animals and specific pesticides which the farmer may not wish to use.