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Agricultural Subsidies and Farm Consolidation: Agricultural Subsidies and Farm Consolidation

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Abstract

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.

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... Today, the US is home to some of the most productive, consolidated, and specialized agricultural systems on the planet. These systems have been strongly shaped by an economic paradigm that prioritizes production and efficiency, technological innovations that target simplified large-scale systems [2,3], federal policies that incentivize specialized commodity production [4,5], and by the increased integration of rural economies in globalized markets [6,7]. Today, over half of US land is devoted to agricultural production, with over 80% of this land cultivated with corn, wheat, soy, alfalfa, or hay [8]. ...
... Over the same period, farm income has sharply declined, with the USDA reporting a median farm income of negative $1735 in 2018 [14]. Many families have left the agricultural sector, as a national trend of farm consolidation has pushed small-and medium-sized farms out of production [2,15,16]. Existing farms are increasingly exposed to fluctuations in global markets, often with devastating consequences [17][18][19]. At the same time, changing climate [20][21][22][23][24] and declining environmental quality [25][26][27] threaten agricultural collapse in many of the same regions. ...
... The implications of the strong association between government receipts and high yields are mixed. Federal programs are an important source of income stabilization for US farmers; however, research suggests that participation in these programs may have negative implications for farm-level adaptive capacity and resource use [2,[59][60][61]. Large farms tend to have greater access to these programs [2,4], and while the link between farm size and yields is mixed [11], this finding may highlight that higher-yielding systems are those that are more likely to have access to and benefit from government support. ...
Article
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We examine the geographies of agricultural yields in the United States, home to some of the most productive agricultural systems on the planet. We model and map yield divergence from biophysical expectations and regional norms for five major crops - corn, soy, wheat, alfalfa, and hay - and assess how this divergence interacts with farm-level resources, farm(er) characteristics, and landscape context. Our results highlight the ways in which human activity has reinforced and intensified the yield geographies defined by sun, soil, and water alone. Yield gains brought by human activity are strongly associated with increased expenditure on inputs to production and receipts from federal programs, but not with net revenue gains for farmers. These yield gains vary across operator race, gender, farm size, and major US region. We also find that beyond a threshold, increased input expenditure is associated with marginally decreasing yields, raising important questions about the interactions between yields and farmer livelihoods. We conclude by discussing the importance of broadening the production-centric paradigm that has dominated agricultural innovation over the last century to include the well-being of the farmers and ecological systems on which agricultural production ultimately depends.
... Subsidy (from Latin subsidium meaning help, support) is an in-kind and/or financial support for an economic entity financed from national or local budget. Dedicated agricultural policy together with efficient mechanism for financial support of agricultural companies by the government make it possible achieve higher performance of the agricultural business (Bruckner, 2016;Prokofev & Sibiryaev, 2019). An analysis of international experience of financial support of the agricultural sector provides for a conclusion that there are no significant differences in approach for such support in different countries. ...
... For example, Bruckner (2016) shows an instance when USA legislation on 2014 U.S. Farm Bill encouraged plowing fragile soils. Naglova and Gurtler (2016) note differing impact of subsidies to agricultural companies of differing scale. ...
... This enables large agricultural companies to introduce advanced technologies and administration methods and to achieve good financial results (Vozhdaeva, Volkov, Kozlov, & Pavlov, 2019). Bruckner (2016) considers US subsidizing practices providing for owners of large-scale farms to receive unexpected profit. ...
... In spite of these challenges, the volume of recent literature documenting the decline of wetlands and aquatic resources, the need to increase agricultural production in the next 30 years, and the plight of small farms indicates Blank (2008) argued that government intervention in this process has slowed progress. Multinational agribusiness firms have thrived under globalized agriculture (Robinson 2018) but continued low commodity prices and subsidy structures have impinged on the ability of small producers, which account for the vast majority of farms, to meet financial obligations (Blank 2008;Bruckner 2016) while simultaneously increasing environmental costs. As a result, farm bankruptcies and consolidation of farmland are inevitable and, ultimately, the agricultural sector of the U.S. economy likely will shrink as investments move to areas of higher potential returns and lower risk (Blank 2008). ...
... Under the current agroeconomic system, small, isolated rural communities, often with little economic diversification, are vulnerable to collapse and their economic revival may require policies other than the Farm Bill (Blank 2008). Crabtree (2016) argued that while the decline of rural America is generally overstated, the Farm Bill through its crop insurance program has facilitated the decline of rural communities by providing financial advantages to large producers and facilitating farm consolidation, an argument also echoed by Bruckner (2016). The roles of globalization and Farm Bill policies on farm consolidation trends are difficult to separate, but both the positive and negative impacts of federal farm programs on rural economies are worthy of further investigation. ...
Article
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Water is essential for wetland function and sustaining migratory networks for wetland wildlife across broad landscapes. Groundwater declines and surface flow reductions that impact aquatic and wetland organisms are common in the western U.S. and increasingly in the eastern U.S. Agriculture is the largest consumptive water use in the U.S. and understanding economic incentives of water-use practices and the legal context of water rights is foundational to identifying meaningful water solutions that benefit all sectors of society. In this paper, we provide a brief overview of water rights in the U.S. and synthesize the literature to provide a broad overview of how federal farm policy influences water-use decisions. We conclude that the ultimate cause of many water-use conflicts is an inefficient farm economy that is driven by several proximate factors, of which outdated water laws and subsidies that encourage increased water use are among the most important. Development of multi-scale water budgets to assess project impacts and by working more intensively at local watershed and aquifer scales may improve conservation efforts. Finally, detailed analyses to understand the impacts of specific federal policies on agricultural water use may enhance water conservation efforts, facilitate long-term food and water security, and provide greater protection for wetland and aquatic resources.
... Increasing federal control over and support of agricultural production has been debated in recent literature, particularly if and how it may promote or inhibit greater sustainability for both farmer livelihoods and ecological health. Evidence supports that U.S. agricultural subsidies are less accessible to smaller, organic, or diversified farming operations, fail to encourage conservation practices, promote commodity specialization (Bruckner, 2016), and systemically privilege White landowners over marginalized farmers and farmworkers (Dunbar-Ortiz, 2014;Ayazi and Elsheikh, 2015;Minkoff-Zern and Sloat, 2017). While subsidies and financial assistance may help mitigate risk associated with crop diversification for farmers, it has also been shown to discourage diversification and support specialized commodity production (Di Falco and Perrings, 2005). ...
... In fact, this reduction may actually support farm consolidation. Large farms can more easily access crop insurance (due to access to greater capital) than small and medium size farms (Bruckner, 2016;Graddy-Lovelace and Diamond, 2017); this reinforces barriers for disadvantaged, small-scale, or aspiring farmers (Calo and De Master, 2016;Rosenberg and Stucki, 2017;Horst and Marion, 2019). Examples of subsidy reduction outside of the U.S. exhibit mixed results. ...
Article
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Over the past century, agricultural land use in the United States has seen drastic shifts to support increasing demand for food and commodities; in many regions, this has resulted in highly simplified agricultural landscapes. Surmounting evidence exhibits the negative impacts of this simplification on the long-term provisioning of necessary ecosystem services to and from agriculture. However, transitions toward alternative systems often occur at a small scale, rather than at a systemic level. Within the National Research Council's (NRC) sustainable agricultural systems framework, we utilize national open-source datasets spanning several decades to broadly assess past and current agricultural landscapes across the U.S. We integrate and analyze agricultural land use and land cover data with policy data to address two main objectives: (1) Document and visualize changes over recent decades in cropland conversion, agricultural productivity, and crop composition across the U.S.; and (2) identify broad policy changes of the U.S. Farm Bills from 1933 to 2018 associated with these land use trends. We show that U.S. agriculture has gradually trended toward an intensely regulated and specialized system. Crop production is heavily concentrated in certain areas, larger farms are getting larger, while the number of smaller operations is decreasing, and crop diversity is declining. Meanwhile, federal agricultural policy is increasing in scope and influence. Through these data-driven insights, we argue that incremental and transformative pathways of change are needed to support alternative production practices, incentivize diversified landscapes, and promote innovation toward more sustainable agricultural systems across multiple scales.
... Continental fisheries have been devastated largely because of nutrient pollution from annual row crop production in the Upper Mississippi River Basin driving billions of dollars and untold C combusted in addressing the problem (Paudel & Crago, 2020). And none of this addresses the devastating social costs of the current model of vertical integration and consolidation in agriculture that exploits labor and drives small-to midsized cattle producers out of business with low prices for their products (Bruckner, 2016;Burchfield et al., 2022). ...
... • Conversion of land into industrial monocultures has led to a dramatic loss in biodiversity, reducing the resilience of ecosystems and jeopardizing the services required by agriculture such as pollination of crops (Dudley and Alexander, 2017;Pleasants and Oberhauser, 2013). • The transition to farming for commodity markets has resulted in massive farm consolidations, soaring farmland prices, population decline in rural communities, and families coping with the loss of land and livelihoods that had been passed down for generations (Bruckner, 2016;Graddy-Lovelace, 2021;MacDonald et al., 2018;Peters, 2019). ...
Article
Since the end of the second World War, the landscapes of the U.S. Corn Belt have increasingly been dominated by large-scale, industrialized agricultural production. Although not without its benefits, industrial agriculture has been shown to be detrimental to the social and ecological fabric of rural communities and beyond. In response, state and federal policy has encouraged farmers to adopt a limited number of strategies that may reduce the negative externalities of industrial agriculture. However, a growing body of research argues that to achieve transformative environmental and social change, the U.S. must transition to alternative food and farming systems. This study explores the potential of such transformative change by integrating the concept of the “good farmer” within a place-making framework to allow us to examine the shared understandings of place among farmers of an Illinois watershed. Through semi-structured interviews, we analyzed the experiences of 17 farmers, focusing on their management practices, connection to the land, and the centrality of farming to their lives. In addition, we interviewed eight non-farmers whose careers or family life were directly connected to local agriculture. The results of our analysis found that the farmers in our study have incorporated a good farmer identity that goes beyond the highly visible productivist notions of faming. The place-meanings of family legacy, stewarding a viable future, and caring for the land were found to be as important to farmers as profit-making and efficiency of their operations. Our findings suggest that a transition to alternative farming systems would likely align with the identity and shared place-meanings of the farmers in our study. Programs and policies intending to facilitate a transition away from productivist systems of farming in the Corn Belt should be designed to support the farmer-held meanings of family legacy, farm viability, and care.
... This said, there is emergent research indicating that maximum yields will soon plateau unless more radical changes such as change in crop carbon use efficiency are made [35,79,80]. Second, even in areas biophysically suited to the cultivation of a crop, the challenges of modern farming may render cultivation unsuitable for many farmers [81][82][83]. Increased input expenditures are strongly associated with unprecedented levels of famer debt [84] and a nearly 40% drop in net farm income since 2013 [85][86][87]. These socioeconomic challenges are deeply exacerbated for Black farmers [42,[88][89][90][91] and other underserved groups [92][93][94]. ...
Article
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Climate change is projected to transform agricultural systems around the globe. Though climate strongly influences where and how farmers cultivate, millennia of agricultural innovation have expanded cultivation geographies far beyond what sun, soil, and water alone can support. Evaluating how climate interacts with human activity to shape cultivation possibilities for farmers is vital to understanding the impacts of climate change on agriculture. I assess how climate interacts with agricultural activity to shape the cultivation geographies of six major crops: corn, soy, wheat, cotton, hay and alfalfa. For each crop, I model biophysical suitability, or the probability of a crop’s occurrence given only biophysical conditions, and agricultural suitability, or the probability of a crops occurrence given biophysical conditions as well as agricultural inputs, farm resources, and farm(er) characteristics. Though biophysical conditions strongly shape cultivation geographies, agricultural activity—particularly the use of crop insurance and agricultural inputs—amplifies and expands the cultivation geographies of these major crops, often into regions biophysically unsuited to their cultivation. I project biophysically driven shifts in cultivation geographies to 2100 under low, moderate, and high emissions scenarios and find that these geographies will shift strongly north, with the Corn Belt becoming unsuitable to the cultivation of corn by 2100. These results indicate that significant agricultural adaptation will be necessary and inevitable in the Central and Eastern U.S.
... Federally subsidized commodities and labor programs could be adapted to better serve small farms and increase accessibility to marginalized people as consumers and potential producers. Previous research indicates that the redirection of federal subsidies away from corporate interests and toward small farms, UA, and communitycontrolled food provision programs may offer a promising pathway toward food sovereignty through UA at a broad scope (Bruckner, 2016;Fisher, 2017;Graddy-Lovelace & Diamond, 2017;Holt-Giménez, 2019;Patel, 2012). ...
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Through community-engaged research, we investi­gate how political and economic practices have cre­ated food apartheid and the ways in which this legacy complicates efforts toward equitable urban agriculture in Salt Lake City (SLC). The study takes place in SLC’s Westside, where an ample number of farms and gardens exist, yet food insecurity is a persistent issue. We partner with a small urban CSA farm operating in a USDA-designated food desert in SLC’s Westside to explore the farmers’ own questions about whom their farm is serving and the farms’ potential to contribute to food jus­tice in their community. Specifically, we examine (1) the member distribution of this urban CSA farm and (2) the underlying socio-political, eco­nomic, and geographic factors, such as inequitable access to land, housing, urban agriculture, food, and transportation, that contribute to this distribu­tion. GIS analyses, developed with community partners, reveal spatial patterns between contempo­rary food insecurity and ongoing socioeconomic disparities matching 1930s residential redlining maps. These data resonate with a critical geo­graphic approach to food apartheid and inform a need for deeper and more holistic strategies for food sovereignty through urban agriculture in SLC. While resource constraints may prevent some small farmers from attending to these issues, partner­ships in praxis can build capacity and engender opportunities to investigate and disrupt the racial hierarchies enmeshed in federal agricultural policy, municipal zoning, and residential homeownership programs that perpetuate food apartheid.
... Farm bill policies like direct payments and insurance subsidies encourage larger farms, farm consolidation and a consequent loss of people from rural agricultural areas (O'Donoghue et al. 2005;Bruckner 2016;Azzam et al. 2021;Johnson and Lichter 2019). Addressing commodity and insurance subsidies is one element of reinvigorating rural communities, although one with steep challenges given the influence of agricultural corporations and conventional agricultural organizations (Hackett 2021). ...
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U.S. agriculture is both a major source of global food and a key contributor to multiple interconnected crises. Climate change, biodiversity loss, and severe impacts on soil and water quality are among the challenges caused by U.S. industrial agriculture. Regenerative methods of farming are necessary to confront all these challenges simultaneously, in addition to addressing the increasing challenges to farm labor conditions. Transforming U.S. agriculture to a regenerative system will require a focus on creating traction for the values, beliefs, worldviews, and paradigms that effectively support such transformation while decreasing the friction that works against them. With a focus on creating traction for transformation, we review the factors and processes that tend to promote and maintain ecological improvements on farms. Starting from a case study that points to some of the sources of friction and traction in the current U.S. agricultural system, we use the framework of three spheres of transformation to focus discussion on how processes that form beliefs and values shape and can reshape farming. We develop a series of points of entry for engaging the systemic changes that will offer farmers traction for transformation. We review literature on agricultural networks, polycentric governance, social learning, agricultural education, and farmer characteristics that lend themselves to ecologically mindful change, thereby identifying interventions that tend to provide traction for change. These approaches, and the supports that allow rural communities and the people that work in them to survive and thrive, are necessary to create the traction needed for farms to undergo a shift to regenerative agricultural practices. We link these changes to the promise of the twentieth century New Deal agricultural programs and the potential of the Green New Deal.
... For example, under Title 1 of the 2002 Farm Bill (in effect until 2007 and formally titled the Farm Security and Rural Investment Act [PL 107-171]), the U.S. federal government made payments directly to farmers to support production of the main agricultural commodities: wheat, corn, barley, grain sorghum, oats, cotton, rice, oilseeds, peanuts, sugar, and dairy products. Subsidies under this program effectively guaranteed a minimum level of income for farms by setting a price floor (Bruckner 2016). ...
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Groundwater from the Ogallala-High Plains Aquifer supports one of the most productive agriculture regions in the world. Yet, despite nearly 40 years of policies designed to conserve and sustain this vital resource, the Aquifer continues to be depleted at an unsustainable rate. We integrate propositions from treadmill of production theory and ecological modernization theory to develop a structural model, focusing especially on the role of technological modernization as a key mechanism motivating depletion. A time-sequenced path analysis of all counties in the Ogallala Aquifer region reveals that groundwater depletion has a strong internal momentum characteristic of an agricultural production treadmill. Technological modernization promotes depletion through Jevon’s Paradox. Increases in water efficiency—more crop per drop—are associated with less groundwater consumption, but more extensive deployments of irrigation infrastructures overwhelm the beneficial effects of increased water efficiency. An income-subsidy mechanism supports the treadmill dynamic. Agricultural production and increased water efficiency do not influence incomes. Instead, incomes are influenced mainly by expansions of irrigation technologies, which generates subsidies, and this dynamic puts further “spin” on the treadmill. The implications of the findings for theory and policy are discussed.
... This allows the largest farms to bid up land prices and accrue ever-larger market share for production, among other benefits. For excellent overviews, seeBruckner (2016) andGuthman (2011). Content courtesy of Springer Nature, terms of use apply. ...
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Local food systems seem virtuous in the larger context of the neoliberalization of global food systems and increasing food insecurity. However, local food systems are critiqued for reproducing neoliberalism when they prioritize niche-market consumerism over enhancing access for poor people. Advocates, in contrast, insist local food systems contribute to an equitable political economy of food if they are place-based and inclusive. Local food systems must not, according to them, be condemned monolithically in light of their neoliberal tendencies, but evaluated instead on a case-by-case basis regarding their potentially innovative solutions to food insecurity. We heed this call by investigating how a regionally-renowned local food system addresses food insecurity in an impoverished corner of rural Appalachia. Specifically, we use qualitative methods, including semi-structured interviews, participant observation, and document analysis, to evaluate the local food system in Athens County, Ohio. Our findings indicate that extra-local processes under neoliberalism, including austerity and economic marginalization, create a large-scale context of malign neglect in which local food security initiatives operate. Place-based strategies for food security, in response, emphasize producer profitability and consumer responsibility as solutions to extra-local constraints. These localized processes of benign neglect, however, reproduce stifling neoliberalisms within the Athens local food system, giving it a defensive stance that fails to promote innovative modes of inclusion despite its sustainable reputation. Malign and benign forms of neglect, working in creative tension, perpetuate a problematic paradox of food insecurity amidst a seemingly robust local food system as neoliberalization operating at a variety of scales remains unchallenged.
... Reformist organizations and visionary policy entrepreneurs are essential to such coalition building (Freedman and Bess 2011;Young and Esau 2016). Without powerful policy coalitions, it is di cult to reverse policies that provide perverse incentives and subsidies in the agricultural sector (Bruckner 2016;Nesheim et al. 2014). Most reformist movements, such as the food sovereignty and the localization movements, have their basis in social movements, (Rosset and Martinez-Torres 2012) and although they face the risk of being co-opted, it can sometimes be necessary to ally with powerful established actors in order to in uence agenda setting The fourth approach to shift structural power is to facilitate new modes of governance in eco-agri-food systems that are polycentric, multi-level and deliberative. ...
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KEY MESSAGES • Information alone often fails to motivate change. Manipulation of data has led consumers to doubt scientific results, serving special interests at the expense of public benefit. Information overload implies the need for synthesis to enable better access and impact. • Rationalizations against the need for change include: fatalism, arguing that business is already changing of its own accord, that cheap food is more important than good food, and that the marketplace will adjust for externalities. • These views do not address the long-term systemic consequences of the global corporate model of food systems in a society that derives calories from corn syrup and protein from hamburger resulting in obesity and disease. • Free market, neoliberal policies are incapable of resolving externalities that affect public goods such as ecosystem services. Faith in the infallibility of the market is a shortcoming of mainstream economics. • Path dependency is a key barrier to change in food systems, causing inertia, but may also lock-in positive systemic change. A science of intentional systemic change is arising, grounded in better understanding of human economic behavior as the basis for collective action. • We espouse not one theory but rather a range of actor-relevant theories of change. • Consumer advocacy can bring businesses to assume greater responsibility for the effects of their actions. This theory of change has found expression in the threat of boycotts and reputational risk. • Certification has led to improvement in production practice within market niches but its true success begins when it pressures change in policy and practice throughout supply chains. • Governance of intentional transformation in food systems requires knowledge of political pressure points, and systematic efforts to shape narratives of principal actors, to redirect financial resources and to promote institutional and societal learning and adaptation. • We address the potential of multilateral organizations and agreements, national governments, the financial industry, agribusiness, producers and consumer groups to respond to the need for change. The roles of different actors are interlocking: there is no single point of entry for a theory of change. • The roles of principal actors are drawn along a continuum of change, suggesting specific roles and types of actions to be addressed in evaluation and intervention. Given societal concern, agents for change may persevere within government, agribusiness or civil society organizations; their ability to bring change is dynamic and opportunistic, and driven by strategic alliances. As levers of agrifood system transformation, it is crucial to engage influential governmental actors as change agents. • Actors’ respective ability to adopt the results of TEEBAgriFood studies as a tool to direct change will depend on how well those results are communicated and adopted as narratives by influential actors and as entry points for education and consumer consciousness.
... More troublingly, states use hunger for social control and as a rhetorical justification for their own interventions; thus, they do not want to fully eradicate its threat [163]. The SNAP program provides too little to afford a healthy diet [194,195], does not vary benefits with food prices, and exists as part of the U.S. farm bill, whose subsidies favor large-scale industrial agriculture [196] and reduce the price of foods whose consumption is associated with greater cardiometabolic health risks like obesity and high cholesterol [197]. Powerful corporate interests spend massive resources opposing effective regulations to protect labor and the environment [198]. ...
Article
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Markets dominate the world’s food systems. Today’s food systems fail to realize the normative foundations of ecological economics: justice, sustainability, efficiency, and value pluralism. Drawing on empirical and theoretical literature from diverse intellectual traditions, I argue that markets, as an institution for governing food systems, hinder the realization of these objectives. Markets allocate food toward money, not hunger. They encourage shifting costs on others, including nonhuman nature. They rarely signal unsustainability, and in many ways cause it. They do not resemble the efficient markets of economic theory. They organize food systems according to exchange value at the expense of all other social, cultural, spiritual, moral, and environmental values. I argue that food systems can approach the objectives of ecological economics roughly to the degree that they subordinate market mechanisms to social institutions that embody those values. But such “embedding” processes, whether through creating state policy or alternative markets, face steep barriers and can only partially remedy food markets’ inherent shortcomings. Thus, ecological economists should also study, promote, and theorize non-market food systems.
... Agricultural insurance is an invaluable protective tool used by many developed countries today. [6][7] Fig. 2 shows the framework for corn insurance. The agricultural insurance system covers three major risks to production issues, price shocks, and catastrophe. ...
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There are two large issues looming over the Chinese market for corn; low profit margins and market fluctuation. Analysis of the industrial market allow us to see that the rising costs and excess of supply create a problem that makes the future of the Chinese corn market look bleak. While national policy supports subsidies of the production costs, it does not show any sort of alleviation of the market crisis. The Chinese government ought to use the powers of big data and internet of things to increase the effectiveness of subsidies by transitioning into insurance compensation for farmers. Financial controls like futures and stock should be used to protect against market fluctuations.
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This paper discusses the benefits and costs of antitrust intervention in agriculture. We argue that over the long run, fixed costs have increased and marginal costs have decreased, which has created a tension between lower food prices and having a large number of farms. As opposed to policies of most industries, agricultural policy seems to place more importance upon producer surplus instead of consumer surplus, which runs directly counter to the goals of antitrust laws. While protecting small farms may potentially be an appropriate use of other policy instruments (such as the Farm Bill), using antitrust laws to break up large agricultural firms and/or protect small farms may result in higher food prices, which is regressive and exacerbates inequality. Furthermore, the application of antitrust law for the purpose of raising food prices and producer surplus is antithetical to its historic purpose.
Preprint
Markets dominate the world’s food systems. Today’s food systems fail to realize the normative foundations of ecological economics: justice, sustainability, efficiency, and value pluralism. I argue that markets, as an institution for governing food systems, hinder the realization of these objectives. Markets allocate food toward money, not hunger. They encourage shifting costs on others, including nonhuman nature. They rarely signal unsustainability, and in many ways cause it. They do not resemble the efficient markets of economic theory. They organize food systems according to exchange value at the expense of all other social, cultural, spiritual, moral, and environmental values. I argue that food systems can approach the objectives of ecological economics roughly to the degree that they subordinate market mechanisms to social institutions that embody those values. But such “embedding” processes, whether through creating state policy or alternative markets, face steep barriers and can only partially remedy food markets’ inherent shortcomings. Thus, ecological economists should also study, promote, and theorize non-market food systems.
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It is well known that insurance market information asymmetry can cause socially excessive cropping of yield-risky land. We show that crop insurance subsidies can cause the same problem absent information failures. Using field-level yield data, we find an inversed U-shaped relationship between crop prices and crop insurance subsidies' land-use impacts. For seventeen counties in the U.S. Prairie Pothole Region, simulations show that 0.05% to 3.3% (about 2,600 to 157,900 acres) of land under crop insurance would not have been converted from grassland had premium subsidies not existed. Land-use impacts of Sodsaver in the 2014 Farm Act are also quantified.
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The development of the next farm bill is a complex, comprehensive process that involves numerous issues. The process will, in part, be driven by the economic climate, the budget situation, the trade arena, and the political setting at the time of the debate. The economic setting and the political setting invite a significant debate on the shape of the farm bill and the potential for new directions or alternatives. The budget setting and the trade setting both present challenges for this farm bill debate in terms of program priorities and potential program trade-offs. In this complex environment, understanding producer attitudes and policy preferences can be valuable to the discussion. The National Agricultural, Food, and Public Policy Preference Survey elicited agricultural producers’ preferences on current policy issues and future policy directions related to the next farm bill. Twenty-seven states participated in the survey, representing 60 percent of all U.S. farms and ranches. More than 63,000 producers were surveyed in the 27 states, resulting in more than 15,000 usable responses. The sample responses were representative of the population of producers in the surveyed states and in the nation as a whole. The survey focused on a number of policy issues and included key questions to identify underlying policy goals and budget priorities. It included questions on specific commodity program issues, conservation programs, trade policy, food system and regulatory policy, and other related policy issues.
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The last century marked a sea change in the way agricultural operations are conducted. This "industrialization" of agriculture has significantly increased efficiency and yields, but it also has generated - As an unintended byproduct - pollution. The pollution resulting from commodity crop operations can have harmful effects locally and downstream. Typically, when the production of a good generates adverse environmental effects, the firm that profits from the activity is required to minimize the impacts. This is rarely the case in the agriculture sector, which is exempt from key provisions of the federal environmental laws. As a result, the harms are externalized and the public bears the pollution costs. The federal taxpayer also supports the agricultural sector through myriad farm subsidy programs. Large-scale farms - those with annual sales of $500,000 or more - represented six percent of U.S. farms in 2009 but received more than half of government commodity payments. These subsidy recipients typically are not required as a condition of receiving payments to implement measures that will protect the environment from pollution generated by on-farm activities. The authors present two recommendations for reform, neither of which would require additional federal subsidy payments. First, large-scale commodity crop operations that opt to receive any form of federal farm subsidy should assume responsibility for implementing a set of baseline stewardship measures to reduce nutrient pollution. Second, these same farms should report on the quantity, type, and timing of fertilizers they apply.
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The objective of this paper is to provide an overview of existing literature, both theoretically and empirically, on the extent to which agricultural subsidies do translate into higher land values and rents and finally benefit landowners instead of agricultural producers. Our review shows that agricultural support policy instruments contribute to increasing the rental price of farmland, and that the extent of this increase closely depends on the level of the supply price elasticity of farmland relative to those of other factors/inputs on the one hand, and on the range of the possibilities of factor/input substitution in agricultural production on the other hand. The empirical literature shows that land prices and rents have in general a significant positive and inelastic response to government support. Such inelastic response is thought to reflect the uncertain future of the farm programmes. And in general, studies have indicated that land prices are more responsive to government-based returns than to market-based returns.
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