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With many farm commodity prices at near-record highs, agricultural subsidies are emerging as a key target in the budget debate. Direct payments of roughly $5 billion per year are coming in for particular scrutiny because they are distributed without regard to market prices. Agriculture industry groups, however, complain that targeting farm subsidies is unfair:
“Some 130 local and national agriculture industry groups wrote to negotiators in mid-June to voice “strong opposition” to any package that would “disproportionately impact” farmers and ranchers.”
But according to the Environmental Working Group’s just released Farm Subsidy Database for 2011, the distribution of the subsidies hardly looks fair:
Only 38 percent of farmers receive subsidies.
The top ten percent of recipients collected 74 percent of the total.
The average payment to the top 10% of recipients averaged $30,751 per year between 1995 and 2010, while
the bottom 80% of recipientscollected just $587 on average per year.
And, from a San Francisco Chroniclearticle following House passage of the last farm bill in 2008:
“A farm couple will be allowed to earn up to $2.5 million a year before government payments are cut off under new rules that lawmaker called a major reform. An urban couple applying for food stamps is cut off at $17,808 in income and may own only one car.”
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.
Senator Bob Corker (R-TN) and Representative Ed Royce (R-CA) have teamed up with Democratic colleagues Senator Chris Coons (D-DE) and Representative Earl Blumenauer (D-OR) to introduce new legislation that would reform US international food aid to deliver more help to more people in crisis, faster.
As donors gather next week in Rome to pledge funds to the International Fund for Agriculture Development , they may be wondering where the United States is. Given the generally high marks this independent fund earns for development effectiveness, the uncertainty around a US pledge is troubling. In this “America First” moment, it’s worth asking when it comes to IFAD, what’s in it for the United States and what will be lost if the United States drops out?
One of the mysteries of development economics is why more people in subsistence agriculture don't migrate to cities where incomes are much, much higher. New data suggests one answer: when they move, their incomes may not go up as much as we thought.