Subsidies Increase for Industrial Agriculture
November 11 , 2004

Farm policies are squeezing small U.S. family farms out of business and fail to support non-traditional practices such as organic farming. Even though organic farming is one of the most promising and fastest growing agricultural sectors, federal subsidies continue to promote industrialized agriculture that places profit before sustainability and relies on pesticides and unproven genetically modified organisms.

The United States Department of Agriculture’s (USDA) most recent agricultural census shows a drop in the total number of U.S. farms while gross output remains stable, suggesting that production is consolidating in a smaller group of large farms. For example, in the past five years, the number of farms producing rice has fallen by more than 16%, as more than 1,500 farms have closed. Gross national rice production, meanwhile, has increased by 14%.

USDA funding practices, meanwhile, place a greater percentage of subsidies with a smaller percentage of farms. In 1995, the largest farms received $3.98 billion, or 55% of all federal farm payments. In 2002, their portion increased to $7.8 billion, or 65% of all federal payments. Almost 30% of agricultural subsidies go to the top 2% of farms and over four-fifths of subsidies are awarded to the 30% largest farms in the nation.

While traditional family farms are closing, sustainable and organic farming practices are rapidly expanding with certified organic acreage doubling between 1992 and 1997 and doubling again between 1997 and 2001. Organic lettuce acreage now accounts for 5% of the nation’s total, and 4% of carrot acreage is certified organic.

Yet the only government funding currently committed solely to organic farming is a certification cost share program established in the 2002 Farm Bill to support growers, handlers, and retailers seeking organic certification from the USDA. Five million dollars of the Farm Bill’s $248.6 billion budget is available through this program.

Other federal programs designed to support struggling farms or promote environmental conservation often do not reach those most in need. Most subsidies issued by the Environmental Quality Incentives Program (EQIP), a Bush Administration initiative that directs 60% of its funds towards helping livestock producers meet environmental regulations, end up in the hands of large-scale farms, because only operations with more than 1,000 animals are regulated.

The Conservation Security Program (CSP) in the 2002 Farm Bill provides significant support for sustainable farming practices, however USDA has waited two years to implement this program. According to the Land Stewardship Project, USDA CSP draft regulations limit the program to eligible watersheds, do not provide enough cost incentives for farmers and ranchers, require some farmers to wait eight years to apply, and discriminate against farmers on smaller acreages engaged in highly effective conservation management.

Crop insurance and disaster payment programs are also biased against non-traditional farming practices. Insurance companies generally use pesticide-based farming as their best-practice standard to determine premiums and reimbursements. A lack of research-based standards for organic yields and crop values makes it difficult to determine what constitutes a disaster and just how much money the farmer lost. The emerging threat to organic farms of contamination by nearby genetically modified crops is also not covered.

While farming subsidies remain stagnant, funding for research into organic and sustainable farming practices has shown modest gains. Two competitive grant-making programs, the Organic Transitions Program and the Organic Research Extension initiative of the 2002 Farm Bill provide a combined $5 million dollars per year while the USDA’s Agricultural Research Service has dedicated about $3 million per year to researching organics. Still, the $3.5 million spent by the ARS in 2003 represents a disproportionately small one third of one percent of its annual budget. Based on relative market size, organic farming should receive at least three times that, or 1.8% of the budget.

Sources: Organic Farming Research Foundation. Information Bulletin. Winter 2004, and Fall 2004 Available at http://www.ofrf.org ; Common Dreams. More Family Farmers Failing Under Bush Administration – Small Farmers Struggle as Programs Benefit Corporate Agribusiness . 09/31/04, http://www.commondreams.org ; Land Stewardship Project, http://www.landstewardshipproject.org ; USDA National Agricultural Statistics Service. 2002 Census of Agriculture , http://www.nass.usda.gov/census .

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