Farmers' Marketing

Farm subsidies from the federal government have been paid to farmers since the 1920's.  They really became prevalent in the 1930's during the depression and the 'dust bowl' days.  At the time they served a useful purpose.  Most farms were very small, inefficient compared to today's standards, and there were many of them.

In the 1930's about 25% of the US population lived on 6,000,000 small farms.  By 1997, 2% of the population livd on farms, and 157,000 farms accounted for 72% of farm sales.  Farms consolidated into bigger and fewer farms.  Technology meant that a much smaller percentage of the population was required to get the fields planted and harvested.

The subsidies gave farmers extra money for their crops, and garenteed a price floor.  In essence, farmers made more money, and prices never dropped below a specific price.  One 2009 report shows that 62 cents of every dollar the farmer took in came from subsidies, totalling $180 billion.

Corn is now subsidized to get farmers to grow it for corn ethanol, a replacement for gasoline.  Rp. Jim Jordan, (R-OH) says the government subsidizes it, protects it with tariffs, and mandates its use, and still it cannot thrive in a rigged market.

The  Energy Policy Act of 2005 mandates that billions of gallons of ethanol be blended into vehicle fuel each year, guaranteeing demand, but US corn ethanol subsidies are between $5.5 billion and $7.3 billion per year.

Many economists argue that these subsidies keep commodity prices artificially low, promoting poverty in less developing countries.  Farmers in those countries cannot compete in the market with food produced at lower subsidized costs in richer countries.

Other critics argue that subsidies and tariffs protecting sugar have created more food ad lower prices that are less healthy to eat.  Corn syrup replaced cane sugar as a sweetener of many foods which are higher in sugar and fats.

The last argument is that mega-farms receive most of the subsidies, providing more to companies that don't need it, and less to smaller farms that would need it more.