Agricultural subsidies granted by the government are intended to assist agribusiness in managing year-to-year performance changes and efficiency due to climate, market pricing, and other variables while assuring steady food security. In practice, this assistance is heavily biased toward the five primary commodities, among which are crop, cotton, rice, wheat, and soybean. For example, other commodities, such as peanuts, are also eligible for federal assistance, albeit the aid is much smaller. Distinct pricing and market regulations exist for dairy and sugar farmers, which are closely controlled and can be burdensome to the authorities. Environmental Working Group, therefore, provided information on most subsidies and illuminates the statistics from different time frames.
For example, according to the most recent 2020 data provided by the Environmental Working Group, most of the first 20 largest receivers on the list are either banks or lending organizations. These entities obtained the payment because the subsidy seeker had a debt requiring subsidized contributions to go to the loan company first. In 2019, the United States Department of Agriculture started to include the company that received the money rather than the company or individual who requested it.
As a result, this effort to hide subsidy beneficiaries from transparency allows the USDA to escape taxpayer responsibility. In total, 6% of banking and credit institutions and the Farm Service Agency received subsidy funds (EWG’s Farm Subsidy Database). Moreover, there are other entities for whom USDA information for any payments made to beneficiaries via most unions is not public. Thus, the receivers and quantities of payments provided through most organizations have not been publicly disclosed.
In 2020, the company that received the most subsidies was the Commodity Credit Corporation. This company is a wholly-owned United States government entity with the authority to purchase, sell, finance, transfer funds, and participate in other operations to increase output, stabilize prices, ensure adequate supplies, and facilitate the effective sale of agricultural products. Agrifund LLC and Agcountry Farm Credit Services represent the second and third places, which received 20 and 7 million dollars out of 8.9 billion funds, respectively. The former is a specialized financing firm that provides financial risk management services to farm owners and agriculture businesses. The latter ensures credit and financial assistance to both rural communities and agribusinesses.
Conversely, the data from 2018 shows that most of the companies that received the subsidies were not banks or lending institutions. For example, the company that received the most significant subsidy, 1 million dollars out of an 8.8-billion-dollar fund, is Seward & Son Planting Company, which cultivates corn, cotton, and soybeans. The following two companies, Don Kittler Farms, a predominantly corn-oriented cultivation business, and Mid-south Family Farms, a company concerned with the cultivation of cotton, wheat, and soybeans, received 1 million dollars each.
Hence, in comparison with the data from 2020, several aspects should be highlighted. For example, in 2018 and 2020, the total amount of subsidies was 8.8 and 8.9 billion dollars, respectively, with the number of recipients being similar. Nevertheless, when analyzing data from 2020, it is evident that most of the biggest recipients are banks or lending institutions. While in 2020, the first three institutions received almost 57 million dollars in total, the first three companies in 2018 received 3 million dollars in total. The mentioned effort of the USDA to allow the recipient of subsidies to avoid transparency might lead to tax evasion.
Work Cited
“EWG’s Farm Subsidy Database.” Environmental Working Group, Web.