NCPA - National Center for Policy Analysis

The Gravy Train That Is Farm Welfare

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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