Subsidized farmers: little house on the prairie or gone with the wind?

There seems to be some bizarre idea in the comments and email that the farm bill aims to preserve subsidies to farmers with revenue of more than $1 million. To be sure, I think the subsidies should be removed for everyone, but that would indeed be less surprising.

However, this confuses revenue and income. We are talking about Adjusted Gross Income aka "How much you made last year".

People earning more than $500,000 in adjusted gross income from non-farm sources would be ineligible for crop subsidies and land stewardship payments. Farmers with more than $950,000 a year in agricultural income would lose 10 percent of their direct payment for each $100,000 a year in income.



This is not going to affect struggling farmers, for the reasons outlined in Ag Weekly:

Ron Abbott, Idaho farm programs chief with the Farm Service Agency in Boise, expects the number of Idaho farmers affected will be low. He reviews forms and taxes regularly and is quite familiar with farmers’ adjusted gross income.


“With the numbers that we review, that AGI is a negative number. Gross income may be high, but that AGI is way down,” he said.

“It’s not uncommon, literally, if you generate $1 million, you’ll spend $900,000 to $950,000 generating that. Profit in farming is about 2 to 3 percent; it’s a very narrow margin. Their expenses are just outrageous,” he said.

That’s why he doesn’t expect many Gem State farmers will be affected by the lower cap.



Farms with $950,000 in Adjusted Gross Income are big, flourishing farms. I'm not sure whether my farming relatives ever saw $1 million in AGI in their long, long lives.

Farm subsidies overwhelmingly do not go to struggling farmers; they go to large, flourishing concerns. This is not surprising; corporate farmers have the resources to become extremely skilled at collecting the subsidies. They also, to be sure, provide most of our food, since farming has large capital costs that get bigger every year.