How We Subsidize Corporate Farm Monopolies

by: Jon Warren, LPNC

There is a monopoly on Food Production in the U.S. by "Big" Agribusiness and U.S. taxpayers are footing the bill of $20–$30 billion per year in farm subsidies. Here are the top 5 consumers of our tax dollars:

1. Corn – 35–40%
2. Soybeans – 20–25%
3. Wheat – 10–15%
4. Cotton – 5–10%
5. Rice – 3–5%

Farm subsidies in the U.S. are distributed through various programs, primarily managed by the U.S. Department of Agriculture (USDA):

1. Crop Insurance Subsidies (40-50%) The government pays a significant portion (60-70%) of farmers’ crop insurance premiums. Corn and soybeans receive the most crop insurance subsidies.
2. Commodity Program Payments (20-30%) Price Loss Coverage (PLC): Pays farmers if market prices fall below a set threshold. Agriculture Risk Coverage (ARC): Covers revenue losses due to price drops or yield losses. These programs mainly benefit corn, wheat, and soybeans.
3. Conservation Payments (10-15%) Funds programs like the Conservation Reserve Program (CRP), where farmers are paid to leave land fallow to prevent soil erosion. Mostly impacts wheat and marginal farmland crops.
4. Disaster Relief Payments (5-10%) Direct aid for extreme weather events like hurricanes, droughts, or floods. Distributed on a case-by-case basis, benefiting various crops depending on the disaster.
5. Marketing Assistance Loans (5-10%) Provides low-interest loans to farmers, allowing them to store crops and sell later when prices improve. Primarily used for corn, soybeans, wheat, cotton, and rice.

But protecting the American Food supply is important, right?

WRONG. Just like with most Government programs that start out with good intentions, they eventually morph into giant bureaucracies that consume more and more tax dollars with more red tape that only benefit the few at the "top of the food chain" (pun intended) that can afford to lobby for themselves.

Most Subsidies Go to Big Farms: About 70% of subsidies go to the top 10% of farm owners—large agribusinesses or corporate farms. Bigger farms use subsidies to expand operations, buy more land, and outcompete smaller farms. Subsidies increase farmland values, making it harder for new or small farmers to buy land.

Where and how did crop insurance begin?

On May 15, 1862, President Abraham Lincoln signed legislation to establish the United States Department of Agriculture and two and a half years later in his final message to Congress, Lincoln called USDA "The People's Department." Congress first authorized Federal crop insurance in the 1930s to help agriculture recover from the Great Depression and the Dust Bowl.

Initially, the program was started as an experiment, and crop insurance activities were mostly limited to major crops in the main producing areas. Crop insurance remained an experiment until passage of the Federal Crop Insurance Act of 1980. In 1994, the program was made MANDATORY for farmers under the Federal Crop Insurance Reform Act of 1994.

In 1996, Congress repealed the mandatory participation requirement. However, farmers who accepted other benefits were required to purchase crop insurance or otherwise waive their eligibility for any other disaster benefits. These provisions are still in effect today.

Participation in the crop insurance program BOOMED following enactment of the 1994 Act. Go figure.

According to estimates by the USDA National Agricultural Statistics Service, in 1998, about two-thirds of the country's total planted acreage of field crops was insured under the program. The liability (or value of the insurance in force) in 1998 was $28 billion, the largest amount since the inception of the program. (Government force will do that.) The total premium, which includes subsidy, and the premium paid by insured persons (nearly $950 million) were also record figures.

This is how the U.S. Government created a monopoly on the American Food supply.

So who Benefits the Most?

Large Agribusinesses Corporate farms dominate subsidy payments.

Crop Insurance Companies: The government pays private insurers billions to manage subsidized crop insurance.

Livestock, Processed Food Industries: Cheap corn and soybeans benefit meat producers and food manufacturers (e.g., high-fructose corn syrup).

In 2022, the federal government allocated approximately $17.3 billion to the crop insurance program. This amount covered various costs, including $12 billion in premium subsidies for policyholders, averaging about 62% of the total premiums, and payments to insurance companies for program delivery and underwriting gains.

• Top 10% of Recipients: Receive approximately 56% of all crop insurance subsidies.
• Top 1% of Recipients: Collect about 27% of commodity payments, with an average payment of over $2 million per recipient between 1995 and 2023.

This concentration suggests that larger, well-capitalized farming operations are the primary beneficiaries of federal crop insurance subsidies. The transparency from the USDA is opaque to say the least. The overall objective of the USDA is to support business as usual with "Big Agri". The USDA has little interest in challenging corporate farming.

How can we move forward and challenge "Big Agri" and the USDA?

Grow your own food!

Eliminate them from the equation. You can buy heirloom and NON-GMO seeds to plant. You can design and cultivate your own garden to your desires. (Native Americans used the three sisters method.) A raised garden bed can fit the smallest yard or apartment balcony for those living in more Urban areas. Find a local community garden to volunteer at. The best part? No government needed.

The next level would be to support your local Farmers market! If you have a car, there are many farms that sell direct outside Charlotte. In Union County, NC the local government has partnered with the County Farmers Market for farmers to sell their goods online. 

As policy, eliminating the unfair practice of the Government picking winners and losers is vital. In North Carolina, creating an agricultural "sandbox" for Aquaponics, Hydroponics, Vertical farming, Regenerative farming and other alternative farming practices would be a great start to begin a new "space race" of farming capabilities that could feed more people with healthier foods that require less water, less land and less need for "Big Agri."

It will always be challenging to take on the establishment. For our own health, we need to do this.