Heads I Win, Tails You Lose Farm Policy
#Plant25 (what the kids call spring planting these days) is off to a strong start. The latest Crop Progress Report from the U.S. Department of Agriculture (USDA) shows that major commodities like corn and soybeans are well underway. If luck and the weather hold, producers could be looking at robust yields. This might sound like good news; however, ongoing trade uncertainty plus a bumper crop with no buyers could equal a bad year for taxpayers and the environment. While Washington has taken steps to ensure farmers will be fine regardless of what happens, the same can’t be said for everyone else.
Unlike most other industries, which also face tariff headwinds, agriculture has a gold-plated, taxpayer-backed safety net that covers practically any potential outcome—apart from the moon falling into the Earth, perhaps. The USDA maintains a metaphorical mountain of mattresses to ensure a soft landing for farmers. Here’s how those stack up:
- Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC): These “shallow-loss” programs protect farmers from changes in yields or revenue based on historical data. They maintain a price floor for the crops considered most important. These programs are expected to cost taxpayers nearly $50 billion over the next 10 years.
- Crop Insurance: Taxpayers cover just over 60 percent of the premium for agribusiness’ crop insurance. Intended to cover bigger dips than ARC or PLC, farmers can choose revenue coverage that guarantees a profit, regardless of yields or other circumstances.
- Ad Hoc Disaster Payments: Despite standing programs that cover a drop in revenue or yields—essentially a worse than expected outcome for a given timeframe, a common scenario for any business—the USDA regularly dispenses supplemental payments on top of the payouts already listed. Disaster payments aren’t limited to truly unforeseen events, such as the damaging floods of Hurricane Helene; rather, recent payouts have been made in response to less-than-anticipated revenues. Despite 2024 being an above-average year, members of Congress declared the modest drop in income for farmers a “market-related disaster.” As a result, payments are underway to many farm households that earned significantly more than non-farm households. In other words, relatively wealthy households are receiving payments from less well-off taxpayers to prevent them from becoming slightly less wealthy—a circumstance that taxpayers already fund programs to guard against.
Now add a feather bed to the pile: trade mitigation payments.
During the first Trump administration, farmers received direct payments to the tune of $22.6 billion in return for income lost due to retaliatory tariffs. Even before the famous “Liberation Day” tariffs were declared on April 2, Secretary of Agriculture Brooke Rollins promised robust support for the farm industry, stating: “Hopefully our farmers and our ag community won’t be hurt by—at least in the short term—by these decisions.”
Papering over losses with cash doesn’t prevent the potential grain glut if planted crops don’t have a market come harvest time. Once again, Uncle Sam has a plan: Set it on fire.
The USDA and the Environmental Protection Agency (EPA) wouldn’t put it so crudely, but on a practical level, renewable energy mandates amount to the same thing. Burning corn and soy products to fuel our vehicles in the form of ethanol or biodiesel creates an important market for the acres of grains grown that people or animals can’t (or won’t) consume. For proof of concept, look at the proposed renewable volume obligations (or “RVOs”) for 2026 and 2027 posted by the EPA on June 13. Primarily derived from corn ethanol, renewable fuel volumes remain fairly flat over 2025 volumes, whereas biomass-based diesel, primarily derived from soybean oil, more than doubles. The 2026-2027 proposal includes another giveaway for farmers: an incentive to ensure fuel producers stick to domestically grown feedstocks. Market prices immediately responded, sending soybeans soaring. As trade outlooks darken, this could increase pressure on Washington to create new pathways for corn and soy consumption—this time in aviation.
Big government always seems to have the back of agribusiness, whether it’s a cash-stuffed mattress to avoid the bumps and bruises of trade upheaval or a mandatory market to artificially boost demand. There’s no similar safety net for the small businesses and low-income families hit hardest by the trade war. Worse, on top of the burden of tariffs, consumers and taxpayers must also bear the cost of the subsidies and trade mitigation payments lavished on farmers. These take their own toll by adding to our enormous debt, compounding economic instability, and harming the environment. And if footing the bill for subsidies wasn’t enough, renewable energy mandates are an equally costly cure for trade pains, heaping higher prices upon food and fuel.
Essentially, Washington is quick to ensure taxpayers absorb the impact whenever there’s a chance Big Ag could stumble. It’s a win-win scenario for farmers and a lose-lose for everyone else—no matter how the coin lands.