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STUDY: Farm Subsidies Gobble Up $20 Billion A Year


by Chris White

The federal government spends more than $20 billion a year on farm subsidies that go mostly to high-earning households, according to a study Thursday from a libertarian think tank.

More than 39 percent of the country’s 2 million farms receive subsidies. The bulk of the subsidies go to the largest producers of corn, wheat, soy, and other agricultural staples, the study notes. President Donald Trump’s 2019 budget promised to end subsidies for farmers with incomes above $500,000 a year, but Congress could work to restore largess for high earners.

One of the stated reasons for the subsidies is to protect farmers from fluctuations in market prices and weak yields. The government also subsidizes these larges farm’s conservation efforts, insurance coverage, marketing, and other tools they use to bring food staples to the market.

Using the government to prop up American farms hurts American taxpayers, according to Chris Edwards, the author of the study and director of tax policy studies at Cato.

“Farm subsidies are costly to taxpayers, but they also harm the economy and the environment. Subsidies distort the decisions made by farm businesses. They encourage overproduction, which pushes down prices and creates political demands for more subsidies,” said Edwards, who is also an editor for, which works on policies meant to reduce the size of government.

Trump also targeted farm subsidies during the 2018 budget. That year’s budget sought to curb payments like crop insurance, conservation assistance and rural development programs, according to reports on the plan.

Cutting programs through farm appropriations bills is not popular with Republican congressmen, especially those in rural states where corn and other agricultural products are central staples of the economy.

Trump’s previous budget proposal only dealt with so-called discretionary programs, where agencies have a set amount of funds for each project. The revised budget proposal would reduce subsidy programs that don’t have a set budget, as well as food stamps, or the Supplemental Nutrition Assistance Program (SNAP), and other safety net programs.

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