Description
This paper analyzes the impact of US agricultural policy—commodity programs (or farm subsidies), international food aid, federal income tax policy and federal farm credit programs—on the farm sector from 1933 to 1996. In these years, farm policies and programs had intricate effects on the pace and direction of farm modernization, the viability of the American small farm, and the development of modern agribusiness. Primarily, farm programs have sustained abundant surplus of certain farm commodities, mainly grains. Prices for these commodities have been kept low due to their abundance. This has profited the agribusiness firms that purchase and process them while returns to farmers have dwindled. Programs have sustained surplus by de-coupling production levels from production incentives through the supplement of farm prices and incomes. They continue to do so to this day. Farm subsidies are the beating heart of the industrial agrifood system. Though farm programs have been deployed with the ostensible aims of protecting small farms, they have actually created the conditions under which small farms languish and agribusiness thrives. Other aspects of US agricultural policy have fueled the overcapitalization of the farm sector by incentivizing the mechanization and growth of farms beyond the dictates of efficiency. The decline of small farms is often justified in popular and academic discourse as a defeat by farms that are larger and more efficient. This is untrue, as larger farms are in fact less efficient but have been rewarded by the skewed distribution of commodity program payments since 1933. The advantages of programs for larger farms are sizable; most production in the industrial agrifood system occurs on farms which are large, less efficient and heavily subsidized, while the majority of small farms receive no government support. This conclusion directly contradicts prevailing theories concerning agricultural development in the 20th century, which mark capitalist development, the Green Revolution, and economies-of-scale as the source of growth in the farm sector, and the reason for the eclipse of the American small farm. This conclusion renders useful information for analysts of the industrial agrifood system and its attendant social, economic and environmental problems. This analysis shows that above all, the industrial agrifood system is not simply the due consequence of economic development, but the product of specific US agricultural policies and programs.
