NCPA - National Center for Policy Analysis

Farm Subsidies Are Still Alive, Well -- And Generous

May 14, 2001

The Freedom to Farm Act of 1996 was supposed to gradually phase out federal agricultural subsidies in exchange for removing production controls and letting farmers plant whatever crops they wanted to. But the federal government is still handing out big bucks to vast agricultural enterprises across the country.

  • The subsidies have nearly tripled with steep "emergency" payments that reached $22 billion last year.
  • Just 10 percent of American farmers receive 61 percent of the dollars distributed.
  • Although the subsidies were originally intended to save small family farms, today's elite group of recipients often own tens of thousands of acres -- and they often use their subsidies to buy the acreage of small operators.
  • Payments are directed at the wheat-producing states from the Texas panhandle through North Dakota, the corn-belt across the Midwest and the rice and cotton states of the Mississippi Valley from Missouri through Louisiana.

While there are other subsidy programs -- like those for dairy farmers and sugar producers -- the row-crop payments are by far the biggest. Ranchers, and farmers who produce fruits and vegetables, receive virtually nothing from the program.

Eight percent of the country's farms produce 72 percent of the country's harvests. Most of the rest of the two million American farmers earn their incomes from jobs off the farm.

Political observers say the payments are secure, with Congress most unlikely to end them in the near future.

Source: Elizabeth Becker, "Far From Dead, Subsidies Fuel Big Farms," New York Times, May 14, 2001.


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