Taxpayers Subsidies Don’t ‘Feed the World’
WASHINGTON (June 30, 2016) – Recent debates over the structure and extent of the federal farm-support system have been governed by romanticized notions of the role American farmers play both domestically and internationally, according to a new policy short by the R Street Policy Analyst Caroline Kitchens.
Due to lawmakers’ fears of being painted as “anti-farmer,” many federal programs intended to support the agricultural sector, such as taxpayer-funded crop-insurance subsidies, go largely unexamined, even as they have become increasingly inefficient and wasteful, Kitchens argues.
“From 2000 to 2014, farmers received an average of $2.20 back in claims for each dollar they paid in premium for federal crop insurance. In other words, farmers who purchase federally subsidized crop insurance almost always make money from the program,” Kitchens writes.
The lucrative program has meant that “farmers treat their crop-insurance purchases more like buying into a subsidized lottery than engaging in risk management,” as evidenced by a 2016 report by Bruce Babcock of the Environmental Working Group, in which Babcock noted it is “a complete misnomer even to call the program ‘insurance.’”
Unfortunately, concerns relating to these abuses have largely fallen on deaf ears, due to concerted efforts by the farm lobby to position American farmers as integral contributors to the fight against world hunger. But Kitchens points out that “of all U.S. acres planted for food, more than half are corn and soybean,” with 40 percent of the corn supply going to produce ethanol and another one-third of the corn supply (and the majority of the soybean supply) being used to produce animal feed. Kitchens concludes:
“Despite its prevalence, the claim that fighting world hunger requires hefty handouts to U.S. farmers does not stand up to scrutiny. In order to craft solutions that address the real causes of global poverty and make our federal farm-support system more sustainable, policymakers must move past this unhelpful talking point and make tough decisions that empower developing nations and strengthen the U.S. agricultural economy over the long term.”