NCPA - National Center for Policy Analysis

USDA Recommends Cutting Farm Subsidies

September 20, 2001

Farm subsidies to big grain and cotton farmers are costing too much, according to a new report from the U.S. Department of Agriculture. The report says the government should spend more on conservation, food safety and other programs that provide broader benefits to the country.

  • The report says federal farm subsidies are causing "unintended (and unwanted) consequences" by encouraging overproduction of crops and driving up land rents, raising farm costs.
  • The report also said the 175,000 largest farms, which produce most of the nation's food, have household incomes that average more than $135,000.
  • Farm subsidies have soared to record levels during the past three years, and a proposed House farm bill would cost taxpayers about $170 billion over the next 10 years to maintain payments near to current levels.

While crop subsidies accounted for a substantial portion of the $55.7 billion in net cash income from farming earned by farm households in 1999, off-farm sources contributed $124 billion, notes the report, in part because for many small farmers (who receive a smaller share of the subsidies than the largest farms), farming is supplemented by work elsewhere.

Source: Associated Press, "USDA Releases Report Supporting Farm Subsidy Cuts," Washington Post, September 20, 2001; Scott Kilman, "White House Seeks to Cut Back On High-Cost Farm Programs," Wall Street Journal, September 20, 2001; based on "Food and Agriculture Policy: Taking Stock for the New Century," U.S. Department of Agriculture, September 2001.



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