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Farm subsidies: helping the rich at the expense of the taxpayer

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The United States spends an average of $20 billion annually in assistance to farmers across the country. That money is supposed to be a “safety net” designed to ensure agricultural stability. But instead, the farm industry’s largest players, unfairly pocket billions of hard-earned taxpayer dollars each year.

It’s a common misconception that most American farms are small, family enterprises. But those family farms you might imagine have rapidly disappeared due to widespread consolidation since the 1930s and the near-constant flow of taxpayer money in the form of subsidies.

{mosads}In fact, in the last few decades, large-scale farms with annual sales over $1 million have roughly tripled. And, according to USDA data, the average farm income in 2014 was 77 percent higher than that of the average U.S. household.

So, today’s subsidy programs essentially redistribute our tax dollars to wealthy farm businesses and landowners. 

And like most government spending, farm subsidies are wrought with waste and abuse. Adding to this problem is the fact that farm subsidies are also not easily tracked.

In 2000, Congress passed a law that prohibited the disclosure of information about farm subsidies and their recipients, leaving taxpayers with little information about where funds are spent. It helps to have friends in high places.

What we do know through limited public records, however, is that the majority of subsidies are granted to the largest 15 percent of all farm businesses. And a 2015 GAO study found that some subsidy recipients had a personal net worth in excess of $1.5 billion–not really folks in need of a safety net. It seems, the larger and more lucrative an operation is, the more subsidies it tends to receive. 

Even more alarming is that a 2016 study by the Environmental Working Group found $9.5 million in subsidies were awarded to members of Congress and their families. 

Should the elected officials who set these policies be capable of concealing when they personally benefit from them? Probably not.

Supporters of subsidies often argue that farming is risky business and requires a certain level of insurance to be successful, but the reality is that farms shutter at a much lower rate than other businesses. 

According to Montana State University agricultural economics professor, Vincent H. Smith, fewer than 1 percent of all farms close down in a given year. He explains: “the three main causes of those failures are catastrophic health-care costs, divorce and incredibly poor management. Fortune 100 companies and Main Street businesses face much riskier financial environments.” By comparison, roughly 80 percent of small business don’t make their first anniversaries.

The simple truth is that farm subsidies aren’t a “safety net,” they’re corporate welfare by another name. 

As the 2018 Farm Bill begins to take shape, Congress ought to pump the brakes on massive payouts to wealthy businesses and pursue policies that bring transparency to the process and protect taxpayer dollars from waste and abuse.

Michael J. Lambert is a federal policy analyst at Americans for Prosperity.

The views expressed by this author are their own and are not the views of The Hill.


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