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Farm payments keep food supply secure


Each year, the Environmental Working Group (EWG) releases its farm program payment database. The database reveals (by state and county) the names of individual farmers and what they have received in farm payments from the federal government. This time around, the EWG reports that more than $131 billion has been paid to farmers via the federal farm programs over the past nine years, including $16.4 billion in 2003.

The database generates curiosity among neighbors and piques the interest of the news media. This year is no different. Unfortunately, the EWG uses the opportunity to perpetuate several myths about the program that must be challenged.

Myth 1: Program payments provide the bulk of farm revenues.

Fact: Though farm program payments totaled about $16 billion last year, gross farm revenues totaled nearly $233 billion, meaning that payments accounted for less than 7 percent of that sum. In Iowa, 2003 payments amounted to around 8 percent of gross farm revenues — $1 billion out of $13 billion — a very small percentage given that the state ranks first nationally in the production of two significant program crops: corn and soybeans.

Myth 2: The system is making farmers rich.

Fact: Last time I looked, there wasn’t a line of people waiting to get involved in farming in my hometown of Brooklyn. Though America’s farmers would rather earn their income from the marketplace, not the government, farm program payments received over the past several years have been absolutely critical to the economic survival of this nation’s family-owned farms. Including government payments, their average return on assets seldom exceeds 4 percent and return on equity invested typically averages 6-7 percent, levels that don’t attract a rush of investors eager to take a risk and grow food.

Myth 3: The largest farmers acquire the lion’s share of farm program payments.

Fact: Many of the large farms cited are multigenerational farms that involve several families. The families typically choose to work together under a common business organization to achieve business efficiencies, take advantage of specialized business roles, produce competitively and ensure continuity of the family farm. In fact, family and multigeneration family farms account for more than 90 percent of the nation’s viable commercial farms. These same farms produce a majority of the program crops grown in the United States and, as a result, receive a majority of the federal farm program payments.

Myth 4: The program represents a cost for consumers.

Fact: Farm program payments represent a public investment in the nation’s food, environmental and economic security. Americans spend about $60 per capita annually on farm payments. In other words, for about the cost of a nice restaurant meal for a family of four, Americans enjoy the world’s safest, most abundant and most affordable food supply. According to the U.S. Department of Agriculture, Americans spend less than 9 percent of their disposable income for food. This compares with 10.2 percent in the United Kingdom, 18 percent in France and 24 percent in Spain.

Myth 5: The system perpetuates larger farms.

Fact: Farms have grown to remain competitive. Many farmers make changes to their businesses to remain involved in farming full time or to welcome a son or daughter back to the farm. To say the program is responsible for larger farms is to ignore such things as advanced technology, increased competition, volatile markets, rising input costs and ever-increasing government regulation.

The current program emphasizes food production so that America can remain food secure. Though not a perfect system, it provides ample food for consumers at reasonable prices. It’s hard to put a price tag on that.

Craig Lang is president of the Iowa Farm Bureau Federation. He and his family manage a crop and dairy farm near Brooklyn in Poweshiek County.

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