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Agricultural Subsidies and Farm Consolidation
Author(s) -
Bruckner Traci
Publication year - 2016
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/ajes.12151
Subject(s) - subsidy , crop insurance , legislation , net farm income , consolidation (business) , limiting , business , agriculture , payment , farm programs , direct payments , agribusiness , windfall gain , agricultural economics , economics , farm income , finance , production (economics) , market economy , engineering , biology , mechanical engineering , ecology , macroeconomics , political science , law
Although agricultural subsidies were begun during the New Deal to provide enough income to enable farmers to continue operating, their net effect has been to raise the price of farmland and to squeeze many owner‐operated farms out of existence, leaving mostly large‐scale operations that are often tied to agribusiness. Numerous efforts have been made, with limited success, to mitigate this problem by limiting the subsidy to small or mid‐size farm operations. The 2014 farm bill, adopted by the U.S. Congress, made the situation worse. Rather than imposing stricter limits on subsidies to the largest farms, the legislation removed existing limits, ended direct payments, and increased subsidies for insurance against crop losses and income risk. The new law not only provides a windfall to owners of very large farms, it also encourages plowing of fragile soils, since the risks of crop failure are now borne primarily by taxpayers. The article concludes by offering recommendations about how to correct these problems