Running Head: SUBSIDIZED FARMING EXPOSED 1

Subsidized Farming Exposed

WC 1,687

Dean Coffman

Keiser University
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Abstract

This is a paper is about the dangerous practices of government and big business, and their roll in

American farming. In it, I will overview the different practices and motives for big business and

government to perpetuate farming subsidies. The means at which they do this will also be

uncovered. There will also be a colorful array of references from experts around the world. I aim

to explain what exactly subsidized farming is and where it comes from. I will also touch on who

the ultimate cost of this little “project” goes to. Several other topics relating so some commonly

overlooked issues relating to subsidies will also be analyzed and synthesized. Issues like

immigration and economical issues in developing nations will be tied into the writing. By the end

of this, I hope to have exposed the true white underbelly of the issue and make those who were

once unaware; aware.

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Title

Many Americans assume that United States farms are a typical business that create a

product and collect a profit for that product. Many Americans assume wrong. Sandor Ellix Katz

(‘06) stated, “Another reason why food is so cheap is that in the United States the major

agricultural commodities are heavily subsidized through a byzantine and hypocritical system that

favors monocropping and larger-scale operations (Katz p.8).” In making this comment, Katz

argues that U.S. farming is not a typical business at all. It is, in fact, an insensitive program that

controls prices and drives big business. I’m of two minds about Katz’s claims that the United

States is the major factor behind a corrupt and broken farming industry. On the one hand, I agree

that the U.S. is perpetuating the problem of monocropping and the destruction of small family

farming. On the other hand, I am not sure if he truly sees the source of the problem. What used to

be the American dream of working hard and providing for the family, has been molded and

shaped into a life of greed and envy. It no longer represents the satisfaction gained from an

individual’s hard work that benefits everyone in the community. It now represents the all mighty

dollar. Ultimately, what is at stake here is the way of life that this country was founded on. Many

other developing nations are also affected by our exports and economy.

What are farming or agricultural subsidies? The online Dictionary by Farlex lists the

legal definition as, “Payments by the federal government to producers of agricultural products

for the purpose of stabilizing food prices, ensuring plentiful food production, guaranteeing

farmers' basic incomes, and generally strengthening the agricultural segment of the national

economy (2008).” In short, the government pays money to farmers to control prices and

production of food in America. There are eight different types of U.S. Federal farm subsidies:

direct payments, marketing loans, countercyclical payments, conservation subsidies, insurance,

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disaster aid, export subsidies, agricultural research and statistics. Most of these programs only

provide subsidies to farmers growing corn, wheat, soybeans, oats, cotton, rice, barley, and a few

other major American staples. This gives yet another incentive to monocropping. Less than one-

hundred years ago farmers grew enough food to support their families and the community around

them. In order to do this careful planning, knowledgeable farming, and diversity were key.

Today’s type of farming only brings haphazard, dangerous, and careless practices that

generations from now will pay for. [ CITATION Fry07 \l 1033 ]

To obtain government assistance for a farming business, it is as easy as applying through

the USDA web site for what ever reason that best fits your situation. The major problem arises

when the top ten percent of the farming industry receive seventy-two percent of the total

payments, and the top five percent collect fifty-five percent of the total payments (CAGW,

2007). US federal assistance programs claim that their main goal in providing subsidies is to

promote small family run farms and help rural farming communities. John Frydenlund from the

Citizen Against Government Waste writes, “Between 1997 and 2002, the only farm size

categories that increased in numbers were those between 10 and 49 acres, which are primarily

hobby farms that rely on off-farm income to make a living, and those with more than 2,000 acres

[ CITATION Fry07 \l 1033 ].” This tells me that the government is doing one of two things. They are

either intentionally providing the majority of the “assistance” to the larger farms for profit and

control, or that the average blue collar farmer of yester year is slipping through the cracks of our

recent assistance programs. If the later is true, I’ll sprout wings and fly right now. Yet again we

find an example of corruption in the US government. If I said I was shocked I’d be a liar.

Some examples of companies who receive tens and sometimes hundreds of thousands in

subsidies from the federal government are places like DuPont, Reynolds Tobacco, and Archer
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Daniels Midland. All of the companies are either very large monocroppers or land holders that

get paid by the government for doing nothing with the land. Companies that have nothing to do

with farming purchase land they know they can collect subsidies from.

Farming subsidies are paid for with American’s tax dollars. This could be one of the

biggest points argued in the never ending debate of subsidized farming. Tax payers that

understand the issue know that what they are being told and what is actually going on are two

different things. Chris Edwards of the CATO institute wrote, “The U.S. Department of

Agriculture distributes between $10 billion and $30 billion in cash subsidies to farmers and

owners of farmland each year [ CITATION Chr09 \l 1033 ].” The problem has not gotten any better.

The bill was passed in 2008 and is back on the table for renewal again. It seems that congress has

a wonderful savvy way of padding their pockets yet again.

Government subsidized agriculture does have it pros but the cons far out weigh them.

The original intention behind subsidized farming was to help farmers struggling through the

great depression to help make ends meet. They were also brought around to help keep the cost of

food low so that people not growing food could afford it.

Chris Edwards [ CITATION Chr09 \l 1033 ] puts it best when he writes:

A large array of farm subsidies were enacted during the 1930s, beginning with the

Agricultural Adjustment Act of 1933. New Deal programs included commodity

price supports and production controls, marketing orders to limit competition,

import barriers, and crop insurance. The particular features of farm programs have

changed over the past seven decades, but the central planning philosophy behind

them has not. While many other industries have been deregulated, agricultural
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policies remain stuck in the past, despite the high costs and ongoing economic

damage.

The question is often asked in times like these; why is our government spending money that we

don’t have? To that, I reply greed. We as a nation hold on to the failed policies of a bygone era

for nothing more than to aid he growth of our wallets.

“American corn subsidies, which led to the flooding of Mexican markets with American

corn following the signing of NAFTA, is the primary factor responsible for the post-1994

internal displacement of rural farmers in Mexico [ CITATION Ric10 \l 1033 ][ CITATION

Chr09 \l 1033 ],” states Rick Relinger of the Prospect: Journal for International Affairs. The

obvious problem of flooding developing nation’s markets with a product or service that they

cannot compete with is not just devastating to them. It’s devastating to us as well. Creating a

situation where neighboring nations cannot afford to farm anymore has brought the problem to

our front door. Many of the South and Central American farmers have been forced to come to the

United States in search of work and housing. However, the source of the problem is here. We as

a nation are over farming our lands and have a surplus of food. Rather than let this food go to

waste a certain allotment of our product is designated to be exported. Because we subsidize our

food so heavily, the price for our goods are far lower than that of developing and even some

developed nations. Of course developing nations are struggling as it is with their own production

without our anvil of “success” slamming down on their industry wreaking havoc. Not only does

this create a problem with immigration in the US because of displaced farmers, our own farmers

are striving to cut the cost of production so low we create a job market for these people to work

in. The need to drive down the cost to grow these different crops has driven farmers to take

extreme and illegal measures. Hiring illegal immigrants is cheap and easy. Turn over rates,
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health insurance, and wages are either low or none existent. The farmers that are struggling

because of a lack of properly placed subsidies need to do what they can to get cost of production

down.

The idea that the average farmer in America is working his fields happy and comfortable

with what he is making is not only false but soon to be history. The average farmer of yesteryear

will soon be completely replaced with massive monocropping farms. These farms will continue

to get bigger and bigger until something crashes or “pops” and we the citizens of the United

States will pay he price. The difference between the housing bubble and the food bubble would

be that people can go without housing, people can move in with others, but no one can go

without food. [ CITATION Ric10 \l 1033 ]

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References

Agriculture Subsidies. (n.d.) West's Encyclopedia of American Law, edition 2. (2008). Retrieved

January 22 2011 from http://legaldictionary.thefreedictionary.com/Agriculture+Subsidies

Cato institute handbook 7th edition. (2007, May). Retrieved 01 2011, from Cato institute:
http://www.cato.org/pubs/handbook/hb111/hb111-18.pdf

Edwards, C. (2009, June). Agricultural Subsidies. Retrieved 2011, from CATO: Downsizing the
federal government: http://www.downsizinggovernment.org/agriculture/subsidies

Frydenlund, J. (2007). Farm Subsidies:. 2007 FARM BILL , 8.

Relinger, R. (2010, April). NAFTA AND U.S. CORN SUBSIDIES: EXPLAINING THE
DISPLACEMENT OF MEXICO’S CORN FARMERS. Retrieved from UCSD:
http://prospectjournal.ucsd.edu/index.php/2010/04/nafta-and-u-s-corn-subsidies-
explaining-the-displacement-of-mexicos-corn-farmers/
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