Where Should Farm Payments Go?
By Richard A. Levins
Person by person, county by county, an Environmental Working Group web site
(www.ewg.org) lists everyone who has received a farm program payment. Such
information, up to now kept confidential, has raised more than its share of eyebrows
during the current farm bill debate. There is considerable outrage over farmers who got
the largest checks. But people have also questioned why some of the recipients got a
payment at all. What are the farm program payment obligations to non-farming
millionaires, to agribusiness corporations, and to many others who in no way resemble
Old MacDonald?
The response from Congress has so far been proposals that would limit the
payment amount that any individual or corporation can receive. Several half-hearted
attempts to do this in the past have resulted in little more than a cottage industry of
accountants and lawyers who helped farmers avoid the intent of the law. Provisions in
the current Senate farm bill are stronger, and offer the best hope we have had in many
years to stop megafarms from getting megapayments.
Payment limits are an important first step, but they are not a cure-all for what ails
our farm programs.
Since the first farm programs were written during the Great Depression, we have
had a goal of supporting a family farm type of agriculture. Later, the goal of a more
environmentally-friendly agriculture was added. But both of these goals have been
hindered by a pervasive program bias in favor of larger farms.
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Before 1963, the government supported the price of certain agricultural products.
The more a farmer produced, the more he or she could benefit from those supported
prices. After 1963, we moved away from supporting prices and began to make direct
payments to farmers that would compensate them for producing at lower prices. Those
payments were also linked to production—the more you produced, the more you were
paid.
In the early days of farm programs, the link between big farms and big payments
went largely unnoticed for a perfectly understandable reason: we did not yet have the
technology that allowed some farms to get very large, while other farms stayed much
smaller. All that has changed. Now very large farms get very large payments, while
much smaller farmers receive next to nothing in most cases.
The natural response is to try to limit payments to any one farmer. While a step in
the right direction, this approach is not without its problems. For example, the current
Senate proposal limits payments to $275,000 per farmer. In practice, the largest farms
will receive the full $275,000, but the smaller farms will receive no more than they did
without the limitation. The larger farms will continue to be rewarded by receiving the
bulk of our payments.
Payment limits could, if we wanted to, be interpreted in a very different way. We
could focus on who will get a payment rather than how much they will get. This type of
farm will get a payment; that type of farm will not.
Current farm bill proposals that would redirect payments to reward environmental
performance rather than production are an important example of new ways to distribute
payments. But there is much more to be done. Do we want to encourage big farms or
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small farms? Independent family farms or corporate-controlled “production units”?
Farms that produce food for local economies, or those that produce commodities for
export markets?
The chorus is growing louder to limit government payments to megafarms. Now,
by extending the payment limit debate, we can at long last turn our attention to a much
more productive question: what kind of farming do we want in exchange for our farm
program payments?
END
Richard A. Levins is a Professor and Extension Agricultural Economist with the
Department of Applied Economics at the University of Minnesota and a Senior Fellow
with the Institute for Agriculture and Trade Policy. He can be reached by e-mail at
dlevins@apec.umn.edu and by telephone at 612-625-5238.
His book Willard Cochrane and the American Family Farm traces the history of U.S.
farm policy in the twentieth century. The book is available from University of Nebraska
Press at www.nebraskapress.unl.edu/.
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