Agricultural Subsidies and Farm Consolidation

Traci Bruckner

American Journal of Economics and Sociology, 2016, vol. 75, issue 3, 623-648

Abstract: Although agricultural subsidies were begun during the New Deal to provide enough income to enable farmers to continue operating, their net effect has been to raise the price of farmland and to squeeze many owner-operated farms out of existence, leaving mostly large-scale operations that are often tied to agribusiness. Numerous efforts have been made, with limited success, to mitigate this problem by limiting the subsidy to small or mid-size farm operations. The 2014 farm bill, adopted by the U.S. Congress, made the situation worse. Rather than imposing stricter limits on subsidies to the largest farms, the legislation removed existing limits, ended direct payments, and increased subsidies for insurance against crop losses and income risk. The new law not only provides a windfall to owners of very large farms, it also encourages plowing of fragile soils, since the risks of crop failure are now borne primarily by taxpayers. The article concludes by offering recommendations about how to correct these problems

Date: 2016
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