Rural poverty has been, and continues to be, a dire issue in need of fixing. But as Congress begins to piece together the 2018 farm bill, it is important to disabuse policymakers of the notion that farm subsidies are a silver bullet in the fight against rural poverty. In a new policy brief, R Street Institute Policy Counsel Clark Packard demonstrates why farm subsidies fail to help rural farmers—and can even exacerbate the poverty problem.
In 2014, the poverty rate in what the U.S. Census Bureau defines as nonmetro areas was 16.6 percent. But as Packard notes, only about 6 percent of workers in nonmetro areas are employed on farms. Most farmworkers actually work in metropolitan areas, not rural counties and the current farm safety net primarily benefits large agribusinesses, not small family farms.
“No one denies there are some legitimate causes for concern among struggling rural farmers,” notes Packard. “Agricultural prices, for instance, have dropped in recent years. But while the United States remains the largest exporter of agricultural products in the world, it is also true that U.S. farmers and ranchers lack preferential or tariff-free market access in certain major countries into which they could sell their products. Frankly, the one true way to benefit American farmers and ranchers is to expand their ability to sell products abroad.”
To expand global markets to whom rural farmers could sell their goods, Packard proposes the United States jump-start the World Trade Organization’s Doha Development Round, which was stalled over the United States’ tepid offers to cut domestic agricultural subsidies. He also recommends the nation rejoin the Trans-Pacific Partnership and take withdrawal from the North American Free Trade Agreement off the table.