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The End Of Handouts: Farm Subsidy Program

1785 words - 7 pages

Agriculture is an ever changing industry, with constant changes in methods and technology. Much like the industry, programs surrounding it are also changing for the better except for one, farm subsidies. The farm subsidy program has gone almost completely unchanged since the early 1930’s. I have lived on a farm for my entire life and have gotten into many arguments with my peers, trying to prove farm subsidies were a necessity for the industry to remain functional. These arguments usually turned into a “who could scream the loudest” match and would usually end in a joking manor. I finally decided to look deeper into the subject being as I didn’t know all that much about the subject rather than the basics. After doing the research I came to the realization that both my friends and I had been partially right. There is one farm subsidy program that is needed, but the rest of the subsidy programs really are not a necessity anymore, and I am not the only farmer stating this. David McKee, a farmer in Missouri, said in an NPR interview that he “doesn’t need his direct and counter-cyclical payment” this year because of his farm grossing millions of dollars a year (NPR). All farm subsidy programs should be cut from the United States federal budget with the exception of crop insurance because farmers do not need the assistance now like they did in the 1930’s.
The farm subsidy program was created by President Franklin Roosevelt in the early 1930’s, for the purpose of helping farmers during The Great Depression. During this time prices of farming commodities collapsed which caused many farmers to go bankrupt. In an attempt to try and salvage the situation President Roosevelt put through the Agricultural Adjustment Act of 1933 (AAA). The ideas that were in the AAA included: paying famers to limit the acres of a certain crop that they plant, purchasing surplus commodities, regulating the marketing of certain commodities, guaranteeing a minimum price for their goods, and to make loans using their crops as collateral; and these programs are still being implemented on farms across the United States (Agricultural Price Supports). Most people do not realize that crop insurance is also a subsidized program. Crop insurance is run by the Risk Management Agency (RMA) which is a division of the United States Department of Agriculture (USDA). The RMA subsidizes a group of private insurance companies to sell farmers insurance at a fraction of the retail price (Update: Farm Subsidies). These insurance policies protect the farmer from a drop in price as well as damage caused by weather.
Only 2 percent of Americans have the “job title” of farmers, so you would think that the budget for the farm subsidy program would be rather low, but in 2012 the USDA spent $22 billion dollars on subsidy programs. Farmers do not need this extra help because in 2010 the average income of a US farmer was $84,400 which is 25 percent higher than the average household income...

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