Have you eaten today? Fed dinner to the family, grabbed a snack on the run? Then you’ve felt the impact of the U.S. farm bill. And so have people who struggle to have enough to eat—both in the United States and in developing countries.
The farm bill, set to be reauthorized by Congress this year, is a wide-reaching piece of legislation. Principally, it aims to help U.S. farmers. Over time it has become less and less successful at doing so. The farm bill includes commodity payments, which are cash payments made to farmers growing mostly five crops—corn, wheat, cotton, rice, and soybeans. Commodity payments are supposed to protect farmers from low prices by making up the difference between a target price and the actual market price.
In reality, commodity payments are not very effective risk management tools for farmers. Because they are based on production levels, commodity payments have shifted dramatically to the very largest farms, which often are also the wealthiest farmers. Farmers who need payments the least are receiving the most, and two-thirds of U.S. farmers receive no payments.
Farmers in developing countries feel the effect of U.S. commodity payments in devastating ways. With U.S. farmers encouraged to focus on the five commodity crops, world markets are flooded with these crops. Cotton farmers in Mali and Senegal, for instance, have a difficult time even selling their cotton in their own countries, unable to compete with the low prices of subsidized cotton from the United States and Europe. For many subsistence-level farmers around the world, U.S. farm policies—and other factors outside their control—can crush hopes of getting out of poverty.
Though less extreme, the picture of rural poverty in the United States is likewise grim. Nearly 400 U.S. counties have experienced poverty rates of over 20 percent for the past 30 years. Nine out of 10 of these “persistent poverty” counties are rural.