WASHINGTON – EWG Senior Vice President for Government Affairs Scott Faber delivered the following remarks before the Cato Institute on Wednesday, September 27.
Though first enacted during the Depression to address low crop prices, our farm safety net has evolved to serve the largest and most successful farmers – at the expense of their smaller neighbors.
Today only 30 percent of farmers grow the “major crops” that are eligible for farm subsidies. And the largest 10 percent of these farmers collect about two-thirds of these subsidies. Only 20 percent of farmers can afford to participate in our federal crop insurance program.
Most farmers – especially those with the greatest need – not only get no help from our federal farm safety net, but they also have to compete for land against their larger, government-subsidized neighbors.
Our farm safety net is so broken that even the Secretary of Agriculture testified that we need a “transformative” farm bill that serves the many, not the few.
Instead, some members of Congress want to take a farm bill that already fails to serve most farmers and make it even less equitable.
They are proposing to increase price guarantees, or price floors, for major crops – even though higher price guarantees would mostly benefit fewer than 6,000 peanut, cotton and rice farmers in a just a few states.
As I said, only 30 percent of farmers grow the “covered commodities” that are eligible for these subsidies, but only 1.3 percent of farmers grow peanuts, cotton and rice.
Of these peanut, cotton, and rice farmers, the largest 10 percent of farms receive more than 80 percent of payments.
Increasing price guarantees – and cutting programs that serve all farmers to pay for these increases – would divert spending from farmers in 38 states to primarily benefit farmers in 33 congressional districts. Many of these farmers have received subsidies for 37 consecutive years, and some have already collected more than $10 million from the taxpayer.
After providing record levels of farm subsidies – more than $20 billion a year over the past five years – we should be reforming our farm subsidies, not increasing them.
Net farm income is near record levels and expected to remain high. While the cost of farming, like most things, has increased, the price farmers are earning in the marketplace has also increased, resulting in net farm income of more than $140 billion.
Farm household income is also well above average household income, and very large commercial farms enjoy annual average household income of more than $1 million.
Increasing subsidies linked to price guarantees – subsidies that overwhelmingly flow to the largest producers – will simply make the inequities in our farm safety net even worse.
Instead, Congress should reform our farm subsidies to place meaningful limits on who can receive subsidies and how much they can receive, and to require that subsidy recipients actually live and work on farms. Congress should also reduce subsidies to crop insurance agents and companies – who right now collect one in three government crop insurance dollars. Reasonable reforms would affect less than 1 percent of farmers and could save more than $20 billion.
We need a farm safety net, but we need one that serves farmers in need, as Congress imagined 90 years ago, not a farm safety that supports only the largest and most successful farm businesses.
