The Farm Subsidy Scheme

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The Farm Subsidy Scheme

InsideCapitolDome
Did you know some of your federal tax dollars end up as handouts to Chevron and DuPont, so they can be farmers? It’s true. The federal government’s farm subsidy program sends a lot of cash to big businesses and wealthy landowners and very little to small family farmers.

The Farm Subsidy Scheme

Did you know some of your federal tax dollars end up as handouts to Chevron and DuPont, so they can be farmers? It’s true. The federal government’s farm subsidy program sends a lot of cash to big businesses and wealthy landowners and very little to small family farmers.

Over the five years from 1996 to 2000, the federal government handed out nearly $59 billion dollars in crop subsidies. That means farmers nationwide received handouts that totaled about 3 times the amount of money the State of Oregon gets from the federal government over a five-year period to run government programs

Nationally, farm subsidies don’t go primarily to farmers in financial need. Low-income farms make up 6 percent of all farms, but receive just 1 percent of all government subsidies. The subsidies are also distributed inequitably; ten percent of the recipients gobbled up two-thirds of all farm subsidies from 1996 to 2000. Sixty percent of farms get nothing from the subsidy programs, largely because they don’t grow one of the crops Congress favors.

Many Oregon farmers are left out. According to the Environmental Working Group, whose online database exposed the subsidy program’s inequities, only about 13 percent of Oregon farms receive government payments, compared to 36 percent of farms nationally. Oregonians’ federal tax money is not only providing handouts to agribusiness, it’s going mostly to farm owners in other states.

A few Oregon farming businesses did pretty well, though. From 1996 to 2000, eight Oregon farming and ranching operations banked over one million dollars each in direct crop subsidies. The subsidies handed out in Oregon, like those given out nationally, were inequitably distributed. Taking all government subsidies into account, the top one percent of recipients in Oregon received more than the bottom 80 percent combined. Readers can look up which Oregonians are getting the subsidies, and the amounts they received from 1996 to 2000 at www.ewg.org/farm.

Congress is currently debating the farm subsidies. The Senate bill would cap the top annual subsidy at $275,000 – still a lot – while the House is satisfied with a more generous $550,000 cap per company per year.

The Senate bill would also take some of the crop subsidy money and spend it on conservation incentive programs, which are more equitably distributed and have a valuable public result. The incentives help farmers minimize the soil and nitrogen runoff in the water supply, hold on to their farms in the face of suburban sprawl, and keep forests and wetlands intact. The Environmental Working Group reports that the federal government is sitting on about $36 million in unfunded conservation applications from Oregon farmers.

The farm subsidy debate will also determine how much money will be available for Food Stamp benefits, important in states like Oregon with high hunger rates and a lagging economy. Food Stamp benefits are proving to be an important and reliable safety net during this recession. Yet, Congress is preparing to give more farm subsidy hand outs to big farm operations than supports to hungry families. Are these the right priorities?

OCPP

OCPP

Written by staff at the Oregon Center for Public Policy.

Michael Leachman

Michael Leachman is a policy analyst at the Oregon Center for Public Policy.

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