America’s (Subsidized) Fruited Plain

How farm subsidies and food stamps affect our grocery bill.

“O beautiful for spacious skies,
For amber waves of grain,
For purple mountain majesties
Above the fruited plain!
America! America!…”

America the Beautiful was based on the soaring words to a poem written in the 1890s. It’s a vivid picture of our heartland — undulating waves of grain in the prairie winds with the royalty of mountains creating a throne around the plain “fruited” from the family farms of the day. It inspired an English professor traveling by train to Colorado Springs.

Yet those waves of grain and the fruited plain exist today largely through corporate agribusiness that has prices guaranteed through the massive subsidies of corn and soybeans. And in an exhibit of the usual market distortions wrought by government interference, these two staples are used primarily in cattle feed and processed foods — not the fruits and vegetables that we know to be healthy for Americans when made available from farm to fork.

What exactly is a subsidy and how does this standard of agriculture impact our food prices?

Simply, according to Merriam-Webster, a subsidy is “money that is paid usually by a government to keep the price of a product or service low or to help a business or organization to continue to function.”

The original intent of the farm bill — which has been renewed every five years since the 1930s — was to protect farmers whose entire financial health could be destroyed by pestilence of insects, floods, droughts or other natural disasters or events outside the control of the growers. Today, however, subsidies and federal “crop insurance” not only essentially remove all risk from farming, if one qualifies, but these massive outlays of taxpayer dollars typically go to corporate crop-growers.

Around $20 billion in farm subsidies are paid annually with taxes collected from American workers’ wages. The largesse goes disproportionately to corn farmers, who in 2010 produced over 32% of all the corn in the world, generating almost $64 billion in revenue. Yet most of that subsidized corn is processed into feed for animals or, far worse, ethanol to meet the government standards regarding gasoline mixture.

On May 2, 2016, the Economic Research Service of the U.S. Department of Agriculture clearly defined today’s American farm. Approximately 11% of U.S. farms are commercial, with 30% being “intermediate” in comparative revenue generated. The average net cash farm income of these farms is forecast at $94,000 — profit — in 2016 with a minimum gross revenue of $350,000. The remaining farms are considered “Residence Farms” whose owners receive their primary income from an occupation other than farming.

The “Family Farm Report, 2014 Edition” documented that 31% of all of the small family or Residence Farms received subsidy payments; by contrast, 80% of midsize and large-scale commercial farms received payments.

Since 1995, 75% of federal subsidies have gone to 10% of farms, the larger agribusinesses. In addition to subsidies, federal crop insurance is supplied with the government (you the taxpayer) paying 65% of the premiums totaling about $89.8 billion over a decade.

According to a February 2014 Washington Post analysis, the renewed Farm Bill of that same year requires that farms choose between the “Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) to receive payments when price (for PLC) or revenue (for ARC) drops below a benchmark.” Translation: If a price drops below a predetermined value, despite reduced demand, excess supply or other factors that might naturally cause a drop in revenue, your tax dollars pay the difference.

Another fun fact about the farm bill is that most might believe the bulk of the spending would be for the purpose of providing a safety net in the case of potential financial disaster. But 80% of the entire cost of the farm bill is attributed to food stamps, which creates an interesting relationship.

According the Journal of the American Medical Association’s Internal Medicine edition published last week, the title of the article exposes the failure of farm subsidies on the front of increasing access to healthy foods. Entitled “Association of Higher Consumption of Foods Derived From Subsidized Commodities With Adverse Cardiometabolic Risk Among US Adults,” the cross sectional, retrospective analysis included “10,308 nonpregnant adults 18 to 64 years old in the general community” whose dietary intake was higher in subsidized food commodities was correlated with greater “cardiometabolic risks.”

In other words, those who eat the foods sweetened with corn-derived fructose and soy-fed animals used in processed meats are more likely to have blood sugar and cholesterol problems, and, thus, heart problems.

So, on the economic front, farm subsidies distort the food market to guarantee certain prices are paid, with your tax dollars used to compensate for any differences.

From the health and wellness perspective, foods covered by food stamps — again, funded by your tax dollars — are not those that will lead to a better state of well-being, but are rather the kinds of food produced with the already heavily subsidized crops.

Finally, viewing farm subsidies through the lens of policy, the belief that a safety net is serving family farms is unfounded. Instead, these subsidies and payment programs prove this payment of enormous sums of money that add to the profits of large agribusinesses is horrible policy.

True competition in agriculture will allow a reduction in consumer costs; will create a market driven by demand not government manipulation; and eliminate corporate welfare.

Indeed, America, we need this. From sea to shining sea.

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