Program Crops versus Rural America

“The future of U.S. farm policy must grapple with two fundamental questions,” says economist Robert L. Thompson, co-chair of the Agricultural Task Force for The Chicago Council on Global Affairs and a professor of agricultural economics at the Johns Hopkins School of Advanced International Studies. “Of the federal dollars allocated to agriculture and rural America, how much should go to farmers as individuals and how much should be invested for the greater good of agriculture and rural America?” asks Thompson. “Of the fraction that goes to farmers as individuals, how much should be linked to the production of specific commodities and how much should be decoupled from what the farmer produces?”

In the early years of farm policy, there was scarcely any room for doubt about the relationship between farm policy and the greater good of agriculture and rural America. When the Agricultural Assistance Act of 1933 was written, farmers made up half the rural population. Today, farm policy exists primarily to enhance the incomes of individual farmers, and any ripple effects for the rest of the residents of rural communities are less than apparent.

In the years since Arlyn Schipper and his wife started their family, they’ve seen the population of their county—one of the most productive farm counties in Iowa—shrink by what they estimate is two-thirds. Population loss is inevitable in farm communities when farms get bigger by buying smaller farms. Communities can withstand a certain amount of population loss, but when schools close because there aren’t enough kids to teach and businesses move out because there aren’t enough customers, it’s difficult to argue that farm policies that encourage consolidation are supporting rural development or the health of communities.

The main reason for farm consolidation is the improvements in agricultural technology that enable large farms to realize significant economies of scale. But technology isn’t developed in a vacuum. When Earl Butz, Secretary of Agriculture during the Nixon administration, exhorted America’s farmers to “get big or get out,” he wasn’t merely voicing an opinion. Information available in recent years leaves little room for doubt that Butz was directly telegraphing the future of farm policy. From 1995-2010, the largest 10 percent of farms got 76 percent of the $262 billion the federal government spent on farm support. Their average annual payment was $30,751—while the bottom 80 percent of farms that received support got an average of $587.¹

Five crops—corn, soybeans, wheat, cotton, and rice—get the largest share of government support.² In farm policy jargon, these are referred to as program crops. They are also sometimes called commodity crops or row crops—picture row upon row of a single crop, stretching out toward the horizon. Corn, soybeans, and wheat get the most government support in absolute dollars, while rice and cotton receive more dollars per acre. Does the U.S. government support for program crops help spur broader rural development? One way to answer this question is to look at regions of the country where farmers get payments to grow rice and cotton. Arkansas leads the nation in rice production, Texas in cotton. Many of the counties in Arkansas and Texas that receive significant farm support have the dubious distinction of being “persistent poverty” counties—meaning that they have had high poverty rates for decades.

In Woodruff County, Arkansas (population just over 7,000), rice producers received $191 million in farm program support between 1995 and 2009. During that same period, the county’s poverty rate averaged 26.5 percent and unemployment averaged 8.6 percent.³ Food prices are low in Woodruff County, as they are in general for Americans. Low food prices may help the county’s poor people get by, but the best anti-hunger program is a well-paying job. By that measure, farm support policies have failed to deliver. The investment of billions of dollars a year has generated little economic development in places where it is needed most.