Massive farm subsidy payments slow rural development in states

By Jon Bailey
Published in the Omaha World Herald, 09/13/07

The writer, of Lyons, Neb., is director of the Rural Research and Analysis Program at the Center for Rural Affairs.

“Rural Nebraska is dying, and we have to do everything we can to stop that.” So said Weldon Sleight, dean of the Nebraska College of Technical Agriculture in Curtis, Neb., last month. Sadly, it may be that the federal government is helping shovel dirt into the graves of rural communities.

In a recent analysis, the Center for Rural Affairs found the U.S. Department of Agriculture spent five times as much in farm program payments to Nebraska’s 20 biggest farm subsidy recipients as it spent supporting rural development in the 20 Nebraska counties suffering the greatest population loss.

The 20 largest farm subsidy recipients received nearly $26 million in farm program payments over three years. Meanwhile, 20 counties with nearly 65,000 residents in 67 municipalities received only $4 million over a comparable period for business assistance, community facilities, community and regional development, housing and community infrastructure.

Top farm program recipients received an average of nearly $1.3 million over three years while residents of the greatest depopulation counties received about $22 per person per year in federal rural development support.

It should be noted that these figures represent not all USDA Rural Development programs, but 18 rural economic and community development grant programs USDA has categorized together.

The comparison is similar in Iowa. There the top 20 farm program recipients received over $24 million in three years, while nearly 316,000 residents in 185 municipalities in the 20 counties experiencing the greatest population decline received $13 million in rural development funding.

In other words, our federal tax dollars supported the 40 biggest farmers in Nebraska and Iowa at nearly three times the level we supported the rural development needs of over 380,000 residents in rural communities suffering the greatest economic and demographic distress.

The rural development programs examined in our report are those most important for rural communities to maintain their population or attract new residents.

Declining population is symptomatic of a spiral that begins with a troubled economy, more migration out of a community, economic and community institutional consolidation and eventually little in the way of economic opportunity for remaining residents.

The result of the spiral of depopulation is a lower tax base, leaving small towns hamstrung by an inability to replace or repair vital infrastructure – a key to keeping and attracting people and businesses. Recent events in New York and Minnesota demonstrate how fragile the nation’s core infrastructure is. It is no different in rural communities; aging infrastructure in nearly every community harms the quality of life of current residents and limits future development.

Often the only way to address this challenge is through federal programs. Rural communities must compete against one another for federal resources. And, as our report details, federal rural development resources are limited and caught in a trap of skewed policy priorities.

Unfortunately, the version of the 2007 Farm Bill recently adopted by the House of Representatives will only exacerbate this problem by failing to adequately fund rural development and balance the needs to all aspects of rural communities.

The Center for Rural Affairs believes Nebraska, Iowa and the nation are well-served with strong and equitable farm programs. We do not advocate eliminating farm programs. Farm programs can and should be reformed, however, to benefit rural communities and all of society.

Farm program payments to large farms should strictly be limited to benefit small – and mid-sized farmers and beginning farmers and their ability to access land. That would make farm programs fairer and save money to invest in the future of rural communities.

As Congress completes the 2007 Farm Bill the central issue is: Should the federal government provide bigger subsidies to the nation’s biggest farms to drive their neighbors out of business? Or, should the Farm Bill focus on supporting family-scale agriculture and investing in the future of rural communities?

The answer will determine the future path of many rural communities – revitalization or deeper graves.


Jon Bailey is Director of the Rural Research and Analysis Program at the Center for Rural Affairs of Lyons, Nebraska, a private, non-profit organization working to strengthen family-scale agriculture and rural communities. More information on the report mentioned here can be found at http://www.cfra.org/oversubsidized.

Get the Newsletter