WASHINGTON ― The so-called farm bill that Congress passed this week will mostly benefit big farms, and Sen. Chuck Grassley is mad about it.
“You’re subsidizing big farmers getting bigger, where the purpose of the farm program is to protect the family farmer and the people who can’t protect themselves, and that’s the medium- and midsized farmer,” Grassley (R-Iowa) told HuffPost on Tuesday.
The farm bill reauthorizes federal programs that dole out about $17 billion annually to help farmers, including some $13 billion to cover price fluctuations and revenue loss. (The legislation also reauthorizes the Supplemental Nutrition Assistance Program.) Though the vast majority of farms in the United States are small family operations ― and smaller farmers are sometimes praised by the farm bill’s proponents ― the big ones get most of that money.
The top 10 percent of farm payment recipients received 62 percent of the funds in 2016, according to the Environmental Working Group, a nonprofit that advocates for changes to farm programs.
“Most of the rhetoric around the farm bill is to make sure iconic family farms survive,” the group’s Craig Cox said, “but the way the subsidies are distributed accomplished the opposite.”
Grassley was one of only 13 senators to vote against the farm bill, which passed the Senate on Tuesday and the House Wednesday with large bipartisan majorities. The legislation sets policy for the next five years with only modest changes to the federal agriculture safety net.
Current law disallows payments to farmers with annual incomes above $900,000, or $1.8 million for a married couple. Grassley had sought to lower the limit to $700,000, but the final version of the legislation omitted his proposal. And the bill included a House provision that would allow more farm family members to qualify for subsidies, which are capped at $125,000 per person annually.
“When you start including nephews and nieces to be in a farm operation, that’s how you get bigger farms. It’s the subsidization that comes through people getting millions of dollars [from farm programs],” Grassley said.
There’s no doubt that farms are getting bigger. In 1987, midsize farms that had 100 to 999 acres controlled 57 percent of the cropland in the U.S, according to the Department of Agriculture, while farms with more than 2,000 acres operated only 15 percent. By 2012, the percentage of cropland operated by bigger farms more than doubled, while the midsize share fell to a third of the total.
Federal subsidies are probably not the primary culprit. A March USDA report noted that crop payments mainly cover field crops but that consolidation has also occurred in livestock and specialty crops.
Another reason for farm consolidation is that the companies that sell farmers seeds and buy their crops have themselves consolidated.
“Because the processing, transport and distribution networks are so concentrated, farmers face lower prices for their goods,” said Austin Frerick, a fellow with the Open Markets Institute, a think tank that advocates against corporate monopoly power.
He noted that in the 1980s, farmers got 37 cents of every dollar consumers spent on food. Nowadays, according to USDA data, farmers get less than 15 cents of every food dollar.
“This drives farms to survive on volume, creating a system where only the largest farms can eke out a living, pushing out most midsized operations,” he said.
If the federal government wanted to help farmers, then, it could start by stopping mergers between giant companies ― like the one between Bayer and Monsanto this year that the Justice Department approved. Bayer will now control 37 percent of the corn seed market, according to Open Markets. DowDupont, the product of a merger approved last year, controls an additional 41 percent.
Sen. Amy Klobuchar (D-Minn.) said Grassley’s payment limits would have helped, but the problem of corporate concentration in agriculture is too big for the farm bill. She said she planned to reintroduce legislation next year that would make it easier for antitrust regulators to prevent mergers. She said she hoped to get a Republican co-sponsor.
“You can’t do antitrust in the farm bill,” she said. “It’s complicated enough.”
The farm bill is mainly designed to make sure that farmers can grow food, said Rep. Frank Lucas (R-Okla.), a former House Agriculture Committee chairman. He suggested that if Congress wanted to keep farms small, it would have to outlaw high-tech tractors and other advances that especially benefit firms with lots of capital.
“The bottom line has never been using the farm bill to decide which crop you should raise or what size farm you should be,” Lucas said.
Igor Bobic contributed reporting.
This story has been updated to reflect the House passing the farm bill.