December 15, 2022
For decades, the farm bill’s farm safety net has had the same goal: to provide farmers some degree of protection against unpredictable disasters or sudden price declines, allowing them to stay in business for another year while providing for family living expenses. Yet, as it currently stands, the farm safety net serves as an open-ended entitlement subsidy that encourages land price inflation, soil-depleting farming practices and systems, farm consolidation, and declining farming opportunities.
Rosie Burroughs, advocate and farmer at Burroughs Family Farm in Denair, California put it plainly when she told us: “When we lose small farmers because of consolidation they will not come back. We will lose them forever.”
The 2023 Farm Bill should put an end to this harm by adopting responsible reforms, bolstering access to capital for beginning and underserved producers with limited assets, and strengthening antitrust enforcement and fair competition through market transparency. To restore competition and build a responsible farm safety net, NSAC calls on Congress to write a farm bill that invests in programs and policies that:
NSAC’s 2023 Farm Bill Platform advances recommendations that would level the playing field for small and mid-sized farms by supporting beginning farmers’ access to land and capital; fixing the flawed farm safety net and improving access for diversified farmers; and addressing corporate consolidation and restoring fair competition.
High barriers to entry still make farming and ranching one of the hardest careers to pursue. Significant hurdles, including access to affordable farmland, high upfront startup costs, and saturation of markets, discourage many from pursuing or being successful starting and growing a farm business. Over the last decade, farmland prices have doubled nationwide and risen far higher in areas with pressure from real estate development and commodity subsidies. Additionally, millions of acres of farmland across the U.S. are set to change hands over the next ten years – during the course of our next farm bill.
Rarely do beginning and underserved farmers have the cash to purchase equipment, inputs, and land outright. That is why access to credit is critical for farmers, particularly those just beginning careers in agriculture as well as socially disadvantaged farmers and ranchers who have traditionally been underserved or discriminated against. Credit allows farmers to acquire the land and supplies they need and get a crop in the ground before the fruits of that labor are available.
Unfortunately, it is precisely those new loan applicants with the greatest on-farm resilience and the best environmental outcomes who are the least likely to be approved or, if approved, to have the most expensive and difficult loan terms. Congress must take steps in the next farm bill to bolster access to capital for beginning, small to mid-sized, and diversified producers and to facilitate the transfer of skills, knowledge, and land between current and future generations of family farmers. The 2023 Farm Bill offers many opportunities to address this challenge. NSAC’s 2023 Farm Bill Platform calls on Congress to:
A farm safety net backed by the federal government is a prudent and necessary means to help protect American producers from the many risks inherent in agricultural production. However, the modern federal crop insurance program uses taxpayer dollars to disproportionately support crop insurance companies and the largest, wealthiest commodity farms while under-serving small and midsize farms, diversified operations, and beginning and socially disadvantaged farmers. It encourages industrial farming practices that erode soil health and leaves conventional farms particularly vulnerable to extreme weather events and market shifts. Further, limitless subsidies and benefits for established farmers are known to increase land prices and rent, barring underserved or aspiring producers from farming. The way we design and subsidize federal crop insurance should not pick winners and losers.
A 2022 NSAC report projects billions in taxpayer savings over 10 years if reasonable caps are instituted on federal subsidies paid to farmers who purchase crop insurance. These proposals would on average impact fewer than 3 percent of the country’s largest farms, saving up to $20 billion and leveling the playing field for family farmers. Savings in federal expenditures can be reallocated to improve the delivery of federal crop insurance and other high priority farm bill programs, reduce burdens on taxpayers, or reduce the federal budget deficit.
NSAC’s 2023 Farm Bill Platform recommends improvements to crop insurance so it can serve the diversity of American agriculture, promote natural resource stewardship, and level the playing field for family farmers through the responsible use of public funds. Specifically, the 2023 Farm Bill should:
Address corporate consolidation and restore fair competition
The food and agriculture industry has become highly concentrated over the past 50 years. To illustrate, just four corporations are responsible for 65 percent of sales in the global agrochemicals market, 50 percent of the seed market, and 45 percent of farm equipment sales. In the United States, just four companies represent 73 percent of beef processing, 67 percent of pork processing, 54 percent of chicken processing, and 45 percent of the retail grocery market. Economists agree that an industry is no longer competitive when the market share of the top four companies is 40 percent or higher, and that ceiling has been clearly exceeded across the agriculture industry.
This concentration hurts farmers, consumers, and rural communities while returning maximum profits to multinational corporations. It inflates the prices that farmers must pay for inputs, drives down commodity prices, and restricts the ability of farmers and ranchers to compete in the marketplace to the point where farmers today receive on average less than 15 cents of every dollar that consumers spend on food. The next farm bill should seek to reverse this trend through policies to strengthen antitrust enforcement and promote fair competition through market transparency.
NSAC’s 2023 Farm Bill Platform calls on Congress to address corporate consolidation and restore fair competition by:
For more details on these policy proposals, we invite you to read our 2023 Farm Bill Platform.