The shrinking market of midsized farms

Americans enjoy a sense of collective national pride about the agricultural economy. The notion evokes mental images of proud farmers who provide our “amber waves of grain” and who weathered the Dust Bowl to provide food for their countrymen. Farmers hold a special place in American history and the American psyche, captured eloquently in the folksy “So God Made a Farmer” speech that Paul Harvey made famous again in the 2013 Dodge Ram Super Bowl commercial.

Nostalgia and sentimentality help to explain the generally broad public support for federal agriculture subsidies. That same support presents a tough uphill climb for those who would like to rein in the ballooning costs of these programs and end their market-distorting effects.

Calls for reform inevitably bring passionate debate. Subsidy supporters claim that any reduction in the size and scope of agriculture subsidies would destroy small and midsized farms and create barriers to entry for young farmers. These hyperbolic claims lead to an ever-expanding safety net. Whenever a fiscally responsible reform actually makes it through Congress, another support program inevitably springs up in its place. In truth, the landscape of American agriculture has dramatically changed over the last 100 years. Farm employment is continually shrinking due to technological advancements and increased efficiency. In 1900, 45 percent of the U.S. labor force was employed in farming; by 2000, this had dropped to 1.9 percent. Farms also are growing in size, with the industry polarized between large farms on one end and small farms on the other.

If farm supports are needed to keep midsize farms in operation, the decline of such farms over the same period that subsidies have grown raises questions about whether farm supports actually serve America’s more vulnerable farms or whether they simply serve as a boon for large agribusinesses. This policy short contends that it is possible to make cuts to support programs in ways that still protect the farms most Americans assume our programs help, but without lending excess support to those with the resources to help themselves.

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