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The Gravy Train That Is Farm Welfare

Daily Policy Digest

Federal Spending And The Budget Issues

Thursday, August 23, 2001

When the 1996 "Freedom to Farm" law was enacted, farm subsidies stood at $6 billion. The goal of the law was to reduce that to $4 billion by 2002. Instead, subsidies more than tripled to more than $20 billion a year for the last three years.

Government payments to farmers is a policy harboring some strange inequities:

  • Farm households have average incomes 15 percent higher than the U.S. average.
  • Over 40 percent of federal farm payments go to the 8 percent of farms with the highest incomes.
  • Producers of just five crops -- wheat, corn, soybeans, rice and cotton -- receive 90 percent of federal farm handouts.
  • Meanwhile, 58 percent of farmers -- including most vegetable, beef cattle and chicken producers -- are able to operate in a market economy without receiving support from taxpayers.
Under the latest farm bill in the House, farm subsidies will soar about $74 billion above 10-year baseline agricultural spending projections -- not including any supplemental spending that Congress may decide upon over the period.

Source: Chris Edwards and Tad DeHaven (both of the Cato Institute), "The Stubborn Seeds of U.S. Farm Subsidies," Washington Times, August 23, 2001.

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