Tuesday, July 13, 2010

What About "Farm Subsidy Inequality"?

Many people get upset about income inequality, and for example the fact that the top 1% earned almost 23% of total income in 2007 (see table above, IRS data here).  But not too many people seem to get very upset about the fact that "farm subsidy inequality" is even greater, see the table above (data here). 

For example the top 10% earned about 48% of all income in 2007, but the top 10% of the recipients of farm subsidies received 74% of all subsidies between 1995 and 2009 (an average of $445,000 per recipient).  For just the year 2009, the top 10% of recipients received a little less, 61% of the total, averaging about $48,000 per recipient.  Where's the outrage about "farm subsidy inequality?" 

12 Comments:

At 7/13/2010 2:01 PM, Anonymous morganovich said...

well, so much for those romantic notions of the government supporting the sturdy but struggling yeoman farmers in their noble toil.

it's just another big business subsidy.

 
At 7/13/2010 2:14 PM, Anonymous Anonymous said...

The largest recipients of farm subsidies are parasites living in blue-state zip codes. And good luck cutting any of it back. Like the myriad of taxpayer funded programs that keep these left-wing leeches fed, clothed and liquored up, Blue Bloc Democrat congressmen and senators will keep the gravy train going, buying up votes with your children's money.

Waste, waste, waste--and you are paying for it.

 
At 7/13/2010 2:43 PM, Anonymous Hieronymus said...

Gonna get me a sugar-beet farm, yes suh!

Rational Actor

 
At 7/13/2010 3:11 PM, Blogger Paul said...

Anonymous 2:14,

Just wait until Benji reads your comment!

These statistics demonstrate Benji owes 80% of the nation's farmers an apology.

 
At 7/13/2010 3:17 PM, Anonymous Lyle said...

Since the subsidy depends upon how much you grow, its not suprising that the large growers get more than the small ones. In particular wheat and corn where one can expand to 1000s of acres. (Note that the original wheat farms in the Red River Valley in ND where that size in the 1880s and many have remained, it was called factory farming then).
It is part of the trend that if you are in grain farming get big or die. Note that also vegetable and fruit don't get any subsidies, except peanuts, it is really corn wheat and soybeans and sugar that get the subsidy. The last several bills have tried to move some subsidies to fruits and vegetables but the powers that be objected.

 
At 7/13/2010 5:46 PM, Blogger Benjamin said...

What a bunch of catamites the Republican Party has become, servicing every "big" farmer in the country.

 
At 7/13/2010 6:08 PM, Blogger Paul said...

"What a bunch of catamites the Republican Party has become, servicing every "big" farmer in the country."

Except all the ones in Democrat districts. Guess that apology won't soon be forthcoming.

 
At 7/13/2010 10:08 PM, Blogger pkd said...

To make it fair, I suggest we give subsidies to all farmers.

 
At 7/14/2010 9:24 AM, Anonymous Anonymous said...

But not too many people seem to get very upset about the fact that "farm subsidy inequality" is even greater, ...

=================================

I've complained about that for years. In my county just ten (of the largest) farms get 90% of all the subsidy money given out in this county.

One of them is a free-market Republican environmentalist who gets $80,000 in subsidies, and who will be glad to tell you how profitable farming is and how his operation proves the need to "save" more farms.

From the government side it is easier to write ten big checks than a hundred smaller ones.

From the applicant side, the larger farms are more likely to have the time and maybe professional help to chase down and apply for the subsdies and other programs (not everything is direct crop subsidies). Larger farms also have larger crops and qualify for larger subsidies.

There is also a market protection aspect to this. In order to qualify for a subsidy you must first be in the business and have a five year history of raising (corn, soybeans, cotton, peanuts, wheat). Which means that basically you will be losing your shirt for five years - just to be able to apply to get on the list. You may be on the list for decades because the big farms get paid first and there isn't enough money to subsidize everyone.

So, why not just get out? Because local law often has land zoned ONLY for agriculture, even when agriculture is not profitable and plenty of other uses are, or could be. Blame the feds for inefficient, unfair or unneeded subsidies, but blame the local officials for an excess of farms, if you beleive we need more pizza huts and fewer farms.

I think that by focussing only one the subsidies (with the attitude that all subsidies are bad) that Anon 2:14 and Benji are missing the systems approach picture. Urban areas have a much larger environmental footprint than they physically occupy, and they have an obligation to pay, and pay fairly, for what they use. In a large part, that is a non-market transaction and one way we compensate (badly) is with various subsidies.

A full systems view of an urban area and all that is required to support it would provide a different perspective. For example, the ability to put up an apartment building in one location and being only allowed to graze cows n another amounts to a huge location subsidy for the "urban" area.

Other countries, such as New Zealand simply pay farmers a stipend for "environmental services", and they may still have crop subsidies.

PKD may not been too far from the truth. Some areas claim that development costs them money because residential building costs more in services than it pays in taxes. At the same time, they claim they need to "save" the farms because they pay twice as much in taxes as they use in services. If that is correct, it is an obvous example of farmers subsidizing the residential or urban areas of the county. This could be corrected by either a subsidy back to the farmers or simply correcting the tax code.

 
At 7/14/2010 9:25 AM, Anonymous Anonymous said...

But not too many people seem to get very upset about the fact that "farm subsidy inequality" is even greater, ...

=================================

I've complained about that for years. In my county just ten (of the largest) farms get 90% of all the subsidy money given out in this county.

One of them is a free-market Republican environmentalist who gets $80,000 in subsidies, and who will be glad to tell you how profitable farming is and how his operation proves the need to "save" more farms.

From the government side it is easier to write ten big checks than a hundred smaller ones.

From the applicant side, the larger farms are more likely to have the time and maybe professional help to chase down and apply for the subsdies and other programs (not everything is direct crop subsidies). Larger farms also have larger crops and qualify for larger subsidies.

There is also a market protection aspect to this. In order to qualify for a subsidy you must first be in the business and have a five year history of raising (corn, soybeans, cotton, peanuts, wheat). Which means that basically you will be losing your shirt for five years - just to be able to apply to get on the list. You may be on the list for decades because the big farms get paid first and there isn't enough money to subsidize everyone.

So, why not just get out? Because local law often has land zoned ONLY for agriculture, even when agriculture is not profitable and plenty of other uses are, or could be. Blame the feds for inefficient, unfair or unneeded subsidies, but blame the local officials for an excess of farms, if you beleive we need more pizza huts and fewer farms.

I think that by focussing only one the subsidies (with the attitude that all subsidies are bad) that Anon 2:14 and Benji are missing the systems approach picture. Urban areas have a much larger environmental footprint than they physically occupy, and they have an obligation to pay, and pay fairly, for what they use. In a large part, that is a non-market transaction and one way we compensate (badly) is with various subsidies.

A full systems view of an urban area and all that is required to support it would provide a different perspective. For example, the ability to put up an apartment building in one location and being only allowed to graze cows n another amounts to a huge location subsidy for the "urban" area.

Other countries, such as New Zealand simply pay farmers a stipend for "environmental services", and they may still have crop subsidies.

PKD may not been too far from the truth. Some areas claim that development costs them money because residential building costs more in services than it pays in taxes. At the same time, they claim they need to "save" the farms because they pay twice as much in taxes as they use in services. If that is correct, it is an obvous example of farmers subsidizing the residential or urban areas of the county. This could be corrected by either a subsidy back to the farmers or simply correcting the tax code.

 
At 7/15/2010 8:56 AM, Blogger pluviosilla said...

What I want to know is how much did Sally Fields get for her family farm? The only dust bowl I see in these figures is the dust Hollywood has been blowing in our faces for 50 years about poor struggling farmers who need a handout from Uncle Sam to avoid starving.

 
At 7/15/2010 11:22 AM, Anonymous Anonymous said...

"What I want to know is how much did Sally Fields get for her family farm? "

=================================

This sounds to me like the windfall profits argument: why should someone get a windfall because their property was converted to some other use.

It isn't a windfall if you have been struggling to keep it in the family for a hundred years or more.

Your state AG school will have budgets for the major crops, grown using different farming practices. Around here the gross profit on an acre of soybeans is $25.

That means your ROI is about 0.0002%. If you own a farm then you are rich by many standards, but if you try to actually operate it, then you will not be rich for long.

 

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