By Matt Bogard
Most people contend that farm subsidies should be eliminated because they benefit mostly larger farms vs. saving the family farm. It’s true that many subsidies are tied to commodity production. As a result, those that grow more commodities (i.e. larger farms) will get more money from the government. As a result larger producers take in a larger share of all subsidies (especially those related to commodities). However, subsidies account for a much smaller percentage of income for large producers, and make up a much larger percentage of total income for medium or small producers.
As the chart above (from the USDA) shows, in 2008 farms earning less than $250,000 /yr recieved a much greater percentage of their income in the form of government payments, while subsidies only accounted for 4% of income for producers with the largest incomes. The chart below indicates that this relationship seems to hold across years for the last decade.
This big vs. small conversation may have populist appeal, but it only invokes class envy, and is not supported by the data when looking at subsidies as a share of income across all farm sizes.
References:
USDA Report- Government Payments and the Farm Sector: Who Benefits and How Much?
http://www.ers.usda.gov/Briefing/FarmPolicy/gov-pay.htm
USDA Report-Farm Income and Costs: Farms Receiving Government Payments
http://www.ers.usda.gov/Briefing/FarmIncome/govtpaybyfarmtype.htm
