Well, yeah. The 90th percentile farm makes $7665 in farm income per year [1] so how much subsidies could they possibly absorb?
"Farms" in the US are overwhelmingly used as a tax avoidance strategy. Only a numerical minority of farms are actually designed to grow food.
Can you say more about this / link to some more info? It's an interesting premise and I haven't heard it before.
"Numerically", ok. But by landmass the majority is used to grow food, right?
How much crop production do the biggest 10% of farms represent?
And here's a more detailed NBER paper digging into distribution of subsidies: https://www.nber.org/papers/w16693
My general impression so far is that the subsidies are not being disbursed pro-rata to production rates, and larger farms (having more legal resources) are much more able to capture these subsidies; for example with exotic ownership structures of lots of subsidiaries, to maximize the capture of subsidies. These financial/legal engineering strategies simply aren't available to smallholders. It's the same sort of incentive structure that produces outcomes like the biggest companies paying the lowest tax rates.
Also, correction, I believe I have mis-quoted the stats off the top of my head -- the Cato article suggests it's more like 80% of subsidies to the top 10%. The general point still stands.
It's really the kind of thing you want to resolve before spreading a statistic like that.
So yes, you maybe said insightful things other than that comment, but you didn’t open up about critical content there.
Source is USDA (2020) America’s Diverse Family Farms.
This is the real problem.
I wish somebody would come up with a simple mechanism to stop all subsidies to companies over a certain size. Yes, it will be gamed, but it's still better than the outright crony-capitalism we have today.
Subsidies certainly are poorly applied and could use some serious work fixing them, but just getting rid of them outright is foolish.
In addition, the Center on Budget and Policy Priorities has written, "many low-income households that receive benefits still have trouble affording an adequate diet. An Institute of Medicine report identified several shortcomings with the current SNAP benefit allotment and noted that most household benefit levels are based on unrealistic assumptions about the cost of food, preparation time, and access to grocery stores. Many families face stark choices between purchasing food and paying for rent and other necessities. If they manage this shortfall by buying lower-cost but less nutritious foods, it can adversely affect their health." [2]
Directing farm subsidies or any other money to current and future SNAP beneficiaries would benefit millions, including working Americans: "The number of SNAP households that have earnings while participating in SNAP has more than tripled — from about 2 million in 2000 to 6.5 million in 2017. The share of all SNAP households that have earnings while participating in SNAP has also increased — from about 27 percent in 2000 to about 31 percent in 2017." [3]
Regardless of dealing with the very problematic farm subsidies, the president and congress must do something about food insecurity.
[1] https://www.salon.com/2014/01/19/what_i_learned_from_a_week_...
[2] [3] https://www.cbpp.org/research/food-assistance/the-supplement...
It's not like both of those things are not equally likely to happen (which is to say not likely)
One is long-term food security - even if global trade is mostly fine right now despite the current hiccups, there's no telling how it's going to be in a decade or two, and it's hard to ramp up production (due to lack of skillset, machinery and infrastructure) if you suddenly need it; so it makes all sense to pay some fraction of a percent of your GDP to ensure long-term strategic security of your food supply, especially if it looks like global tensions will eventually rise due to climate change.
The second aspect is that even in the current circumstances we're seeing rapid urbanization and depopulation of the countryside, which is generally seen as a problem for many areas. In a "natural" regime without rural subsidies this would happen even faster.
The subsidy argument is a scam anyway. It's a commodity market. The margins will be razor thin, the end. If you subsidize production, prices go down. It will eat the whole subsidy and leave the margins razor thin.
The only way the subsidy helps you is if you get more of it than your competitors. Now who do you think that applies to, the family farm or the huge corporation with lots of lobbyists?
Your misunderstanding is that a subsidy is not aimed at one US farm versus another, it's US farms versus foreign farms.
The reason should be pretty obvious, without the subsidies they would be no US farms. And then in time of war there would be trouble.
There are a huge number of US industries that exist only to make sure that US capacity will remain even in time of war.
The same goal could be accomplished with tariffs, but then the price of food would be higher.
The claim implied that the small farms get more of the subsidy, i.e. that they would be the ones wiped out without it.
> The reason should be pretty obvious, without the subsidies they would be no US farms.
Why would there be no US farms? Real estate in San Francisco is much more expensive than it is in Mexico City or the like, but farmland in Oklahoma is not uncompetitive with farmland outside of the US.
If this was the real reason then the subsidies wouldn't be suspiciously concentrated at the location of Iowa caucuses.
Politicians are crafty buggers who will repurpose anything they can to provide themselves with an edge, so that doesn't necessarily say anything about the theory behind the subsidies.
I would definitely argue that there are simpler ways of helping low-income families to afford food though, if that is your goal... just lower their taxes further, or give them negative tax / UBI if they are already paying no taxes, rather than adding lots of complex gears to distort the economy to try and affect the same outcome. Or more food stamps if you don't like the idea of poor people spending their tax rebate dollars on non-food items that they prefer.
That's assuming that you would lower taxes uniformly instead of e.g. lowering them for the lowest tax bracket, which is in no way required.
As I understand it, during a bread riot, free marketeers get eaten first.
I read an interesting book recently (Seeing like a State) that makes the claim that large-scale monocrop industrial farming is only actually “optimal” if you don’t price in the heavy subsidy, and if you ignore the non-revenue contributions of small-hold agriculture (e.g. the land might provide fuel, crafting materials, and otherwise support the farmers in a way that doesn’t show up on the balance sheet). Not to mention that the larger farms tend to be extractive, in that they are using up water from the water table and nutrients from the soil, and so they will eventually degrade the land to the point where it cannot be productive any more.
I did some digging and the farm subsidies in the US are truly eye-watering, and particularly notable is that the biggest 10% of farms take 90% of the subsidy, so we are not even subsidizing “traditional working farmers” or anything like that, just shipping hundreds of billions to huge ag corps.
I wouldn’t claim to be an expert nor to be certain about those economic claims though, and would be interested in others’ thoughts here, particularly other books you found useful on the subject.