Crop Insurance Subsidies Push Land Prices Up, New Farmers Out
MANKATO, Minn. - Originally intended as a safety net against weather extremes for family farmers when established in the 1930s, a new analysis of subsidized crop insurance says it's putting the future vitality of small towns and rural Minnesota at stake.
The report also says that by providing guaranteed income on even marginal farmland, subsidies are pushing prices per acre higher - and pushing many beginning farmers off the land.
Among those who have felt the struggle firsthand is Emily Hanson, who just moved her family's livestock farm to Amery, Wisconsin from southwest Minnesota.
"We decided to move for many reasons, but one of the reasons is we couldn't really afford to farm on soil like that," says Hanson. "Land prices are driven up by people who run thousands of acres, and who can get subsidies and crop insurance."
The new series of white papers from the Land Stewardship Project also notes that more than 50 percent of all crop insurance subsidy payments end up in the pockets of less than two-and-a-half percent of the nation's farmers.
According to the most recent U.S. Census of Agriculture, the only size category of Minnesota farms that has increased in recent years is the one consisting of operations over 2,000 acres in size. Hanson says that with consolidation and higher land prices, less and less room is becoming available for young families who could help grow and strengthen the rural economy.
"Where we were in southwestern Minnesota there are so few young people in general," says Hanson. "There are few young people farming, in part, because it's not really a hospitable environment. It's mostly just these huge farms."
The Land Stewardship Project is calling for limits on how much individual producers can receive, along with other reforms to make payments more transparent and accountable. The crop insurance subsidy program cost taxpayers almost $60 billion from 2003 to 2012, and the total is expected to reach $90 billion over the next decade.