Policy Documents

How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too

Brian Riedl –
June 20, 2007

This year's expiration of federal agriculture policies gives Congress an important opportunity to take a fresh look at the $25 billion spent annually on farm subsidies. Current farm policies are so poorly designed that they actually worsen the conditions they claim to solve. For example:

  • Farm subsidies are intended to alleviate farmer poverty, but the majority of subsidies go to commercial farms with average incomes of $200,000 and net worths of nearly $2 million.
  • Farm subsidies are intended to raise farmer incomes by remedying low crop prices. Instead, they promote overproduction and therefore lower prices further.
  • Farm subsidies are intended to help struggling family farmers. Instead, they harm them by excluding them from most subsidies, financing the consolidation of family farms, and raising land values to levels that prevent young people from entering farming.
  • Farm subsidies are intended to be consumer-friendly and taxpayer-friendly. Instead, they cost Americans billions each year in higher taxes and higher food costs.

Lawmakers would be hard-pressed to enact a set of policies that are more destructive to farmers, taxpayers, and consumers than the current farm policies. For these and other reasons, organizations representing taxpayers, consumers, environmentalists, international trade, Third World countries, and even farmers themselves have united around the shared conclusion that the current farm subsidy system is failing and in dire need of reform during this year's reauthorization.