I have had several telephone calls recently about farm subsidies. In non-farm settings, I have been very assertive with folks that farm subsidies really don’t exist anymore, “only in the form of crop insurance.”
Well, it turns out that is not the whole truth. I always include the fact that nearly 80% of the farm bill is food assistance and that part is true but a deflection I no longer make. Farm subsidies are changing the landscape of agriculture and I think we must all take a hard look at this issue.
First, I want to say I have never taken a subsidy and when we purchased our current farm I allowed what little base that been established to expire. We grow forage for grazing animals and no row crops.
In full disclosure, under a strong nudge from our lending institution in 2020, we did have a Payroll Protection Program deposit into our account. We did not send it back as we could have so I reckon I cannot say that I have never taken a dollar from the government.
I remember a conversation I had with my late father when he told me that he was going to start taking a farm subsidy. That would have been in the early 2000s and he knew I was going to express my disappointment. His response was “Trent, I didn’t want to but the bank said I really have no choice.”
What is the real story with farm subsidies?
The calendar year 2020 was a game changer in the farm subsidy business. President Donald Trump was trying to use leverage around the world when it came to exporting farm commodities, which I agreed with, but to follow up he started handing out huge payments to farmers. In fact, the U.S. Department of Agriculture reports that 2020 records reflect double payments to farmers above 2019.
Successful Farming reported this:
“The USDA estimates farmers will receive $24.3 billion in coronavirus payments this year, along with $5.9 billion in Payroll Protection Program loans, which will be forgiven in most cases; $3.7 billion in trade war payments; and $10 billion or so in traditional farm subsidies and land stewardship payments. In 2019, direct payments totaled $22.4 billion, less than half of this year’s amount.”
Data suggests that subsidies in 2020 accounted for 39% of net farm income in that year, the largest share of income since 41% in 2001. The highest share ever was 65% in 1983, during the worst of the farm recession, according to USDA economist Carrie Litkowski.
Upon studying the USDA data since the 1940s, the average as a percentage of net farm income is hovering about 25%. In very uncertain economic times in this country, we have seen unbelievable prices for land selling at auction in the past 30 days. The crop farmer has the assurance that they will get their investment back with or without a crop. The livestock producer does not.
It is not my agenda to pit livestock producers against crop producers because we rely on each other. My greatest concern is that there is a bullet train headed toward the next farm bill to start subsidizing livestock producers through a livestock revenue risk plan. How much more of a burden are we going to put on the backs of our children and grandchildren with all of this “free money”?
Who here has not complained a ton about the extreme subsidies and government control the European Union has over food production? I for one do not want to join them because I know people there. They are fully controlled by the government and that’s something you can take to the bank.
Editor’s note: The views expressed here are the author’s own and do not represent the views of High Plains Journal. Trent Loos is a sixth generation United States farmer, host of the daily radio show, Loos Tales, and founder of Faces of Agriculture, a non-profit organization putting the human element back into the production of food. Get more information at www.LoosTales.com, or email Trent at [email protected].
