Reexamining U.S. Agricultural Subsidies

By Owen Labruna ’24

Owen Labruna ’24

While the Great Depression affected almost all sectors of the United States economy, the farming industry, which employed nearly a quarter of the country’s population, was hit particularly hard. In response, one of the first laws passed by the Roosevelt Administration was the Agricultural Adjustment Act of 1933 (AAA). Although it had good intentions at the time, the AAA has largely devolved into direct handouts to farmers, overwhelmingly incentivizing the production of only five crops: corn, soybeans, wheat, cotton and rice. 

While government subsidies persist, the agriculture industry has changed drastically. Despite representing only 10% of incentive recipients, large corporations now control much of the farming industry and receive almost 66% of subsidy dollars.

In addition to the diminishing benefits to small farmers, these subsidies contribute to America’s growing obesity epidemic and the acceleration of climate change and encourage detrimental farming practices such as monocropping and the overuse of pesticides. The U.S. government should reallocate subsidy money to incentivize the production of healthier crops and prioritize working-class farmers over corporations.

The subsidization of large corporations leaves middle and working-class farms behind and at greater risk of failure. Between 1995 and 2020, 62% of farms received zero dollars in federal subsidies; the top 1% of wealthy agricultural corporations received over a quarter of the benefits. The government also subsidizes crops that heavily rely on technology, leaving farms that produce labor-intensive crops such as fruits and vegetables without government aid. While the government caps the benefits for individual farmers at $125,000, corporations have exploited loopholes to work around this limit. Closing these loopholes would not only prevent corporations from collecting excessive subsidies but will allow the federal government to reallocate these funds to smaller farms in need.

Subsidies also produce a surplus of grain and corn, which, in turn, leads to the cheap production and increased consumption of unhealthy products such as high-fructose corn syrup (HFCS), an ingredient in everything from cereal to ice cream, from soda to fast food. In addition, 95% of all feed grain used in factory farming consists of corn, leading to lower prices for—and greater consumption of—meat products. Research suggests that processed meat and HFCS may increase the risk of obesity—and it may not be a coincidence that 40% of Americans are obese, according to the National Institutes of Health. Subsidizing healthier crops would help families, especially poor and working-class families, access affordable healthy diets.

Federal agriculture subsidies also negatively affect the climate. Under current economic incentives, farmers plant the same crops every growing season, reducing overall crop diversity and dissuading farmers from planting cover crops that protect farmlands. Furthermore, subsidies incentivize farms to rely on crops that are not drought-resistant, leading to the overuse of groundwater resources, such as the Ogallala aquifer in the Midwest, which supplies 30% of irrigation water in the U.S.

Agriculture also produces 11.2% of U.S. greenhouse gas emissions. Corn production used for ethanol and cattle feed leads to increased emissions and methane released from animal manure and the water used to cool ethanol manufacturing facilities depletes aquifers. Shifting away from corn subsidies would significantly reduce meat and ethanol production in the U.S. and support climate change initiatives.

Proponents of farm subsidies often point to increased grain and corn yields lowering food prices for families while protecting crops in the event of natural disasters or rapid shifts in demand. However, lower prices for corn and grain are economically beneficial only in the short run, as the resulting high-calorie, low-nutrient diet leads to poorer health outcomes in adults and expensive medical issues later in life. The government should redirect subsidies to incentivize healthier and more sustainable farming practices and promote the diversification of crop yields while preserving low prices.

Rather than eliminating agriculture subsidies outright, the U.S. should adjust and target them to solve its current problems. We have the opportunity to give small- and medium-sized farms the chance to regain the economic power taken by corporations over the last 80 years while fighting climate change and obesity. Large corporations do not need another blank check from the federal government. For a healthier and stronger America, we must adopt agricultural policies that support small businesses, reduce carbon emissions and increase the production of nutritious foods.