NCPA - National Center for Policy Analysis

Bigger Farms, Bigger Subsidies

August 9, 1999

Experts say the nation's agricultural system -- with small farmers barely hanging on and large conglomerates dominating markets -- is the direct result of a decades-long failed agricultural policy rooted in government intervention.

  • The government will plow close to $24 billion into agriculture this year -- assuming that the $7.4 billion "emergency" farm aid bill becomes law.
  • That will account for almost half of all farm income, Agriculture Department figures show.
  • Most of the money will go to increasingly industrialized production of a few basic commodities such as wheat, soybeans and corn -- not the sweet corn of summer, but corn that animals eat.
  • One-third of the wheat, three-quarters of the corn and almost all the soybeans are used for animal feed, not food for humans.

Much of the market for most of those commodities is controlled by corporations like Cargill, the nation's largest privately-held company, and Archer-Daniels-Midland, which was recently fined $100 million for price-fixing. These two control 60 percent of the export market for American grain.

The number of small farmers -- those with annual gross incomes below $250,000 -- has declined by 75 percent since the 1960s. Midwestern corn farmers' gross earnings are about the same as they were in 1950, although their yields have doubled.

Source: Tim Weiner, "It's Raining Farm Subsidies," New York Times, August 8, 1999.


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