Two weeks ago, I wrote about the 2023 farm bill, which stands to be reauthorized by Congress this fall. The bill, I argued, amounts to unnecessary corporate welfare for large industrial farms who do not need the assistance. Legislators should therefore implement sensible payment caps for farm bill programs to prevent needless and unfair spending. In this article, I want to situate the farm bill within our local New England agricultural context, and in doing so, add more detail to the arguments from my previous piece. Though New England-local agriculture is smaller and less productive than its counterparts in the middle of the country, it offers non-economic benefits to the community it serves that should be supported by the farm bill.
Though the farm bill is a piece of national legislation, it is oriented towards the highly productive farmland in the Midwest, where large industrial farms produce staple crops like wheat, corn and soybeans. These farms are responsible for the U.S.’s global dominance in agricultural commodity markets, and they provide the foundation for national and global food security. Soybean farms also provide the massive amounts of feed required to operate the industrial cattle ranches in the Mountain West.
These large farms are so successful because they possess what economists call “economies of scale.” As farms increase their acreage, they become more productive per acre. This occurs because farming is capital-intensive, meaning that it requires lots of expensive machinery and specialized technology. A farmer who owns this kind of capital is incentivized to farm as much land as possible, in order to make the best use of these expensive purchases.
Faced with these incentives, farms across the country have grown in acreage over the past several decades. Soybean farms, for example, have more than doubled their average acreage since 1978, growing from 114 acres per farm to 297 acres per farm in 2017. Even more striking is the concentration of productivity among the largest farms. Though large farms with acreage greater than 250 acres account for only one-third of all soybean farms, they contributed 81% of the 2017 soybean crop.
The incentives resulting from economies of scale have concentrated agriculture revenues with the largest U.S. farms, who have used their economic power to lobby for favorable federal agricultural policy. As I explored in detail in my article from two weeks ago, several farm bill subsidy programs determine payments based on productivity per acre, which means that the largest and most productive farms — concentrated in the Midwest — receive most of the payments.
This policy paradigm causes trouble for New England agriculture because the landscape and climate do not allow for the same economies of scale. New England’s soil is rockier, and the region’s hillier topography does not allow for the perfectly rectangular — and highly efficient — expanses of agricultural plots common in the middle of the country. New England land prices also tend to be higher because of higher residential and commercial demand, which prevents farmers from expanding their operations and cashing in on economies of scale.
This unique ecological environment ensures that New England farms cannot cash in on farm bill subsidies like their highly-productive counterparts in the middle of the country — and rightly so, some argue. The policy rationale for the farm bill rests on the idea that the most economically productive farms should receive the greatest benefit from the federal government.
Unfortunately, this rationale is backwards. The most productive farms should require the least federal help because they are so productive. And smaller, less productive operations, like those in New England, should receive a greater share of the benefits because they provide non-monetary benefits to their communities.
In the language of economics textbooks, the small New England farm offers positive externalities — that is, benefits that are external to the market — to its neighbors. It does also offer internal benefits: a certain quantity of food, supplied at a certain price, though usually a smaller quality and a higher price than a larger industrial farm could offer. But these small local farms offer so much to their local communities beyond internal market efficiency. When consumers can purchase their food from farms they know personally, they have much better information about the quality and safety of their food.
The dangers of factory farming and food packaging — both to animal wellbeing and human health — are well-documented and longstanding. More than a century ago, Upton Sinclair published his groundbreaking book “The Jungle” to expose the horrendous safety standards in Chicago meatpacking plants. The book prompted a series of reforms in the United States Department of Agriculture to enforce safety inspection for all meat sold in the U.S. Before the industrialization and globalization of food production, safety standards were socially enforced at the local level, by friends and neighbors in close proximity.
Beyond the immediate benefit of food safety, I wrote last year about the broader social benefits offered by tight-knit, self-sufficient local economies. In today’s tenuous international climate — where globalization is no longer the rule — returning production and consumption to close proximity will strengthen local communities against the increasingly harsh winds of international trade and establish vibrant socioeconomic life at a small scale. These are the kind of social benefits that local agriculture can offer — and the kind of benefits that the current farm bill does not encourage because of its biased subsidy structure.
Unfortunately, this bias in the farm bill is structural, a result of political reality and unlikely to change soon. There are, however, opportunities for moderate change within some farm bill programs that can accomplish these local priorities for New England farms. The three largest environmental incentives programs in the farm bill — the Conservation Reserve Program, the Conservation Stewardship Program and the Environmental Quality Incentives Program — distribute subsidies based on faulty formulas that do not account for populations that stand to benefit from environmentally-friendly farm management in New England.
CRP, for example, does not account for the millions of people who live in close proximity to New England farms along the Connecticut and Hudson Rivers who stand to benefit from water quality improvements caused by better farm management upriver. Instead, the CRP concentrates on preserving arid Great Plains land threatened by erosion and habitat destruction — a noble goal, to be sure, but arguably, not as important as improving drinking water quality for the millions who live near New England farms.
CSP and EQIP suffer from the same bias by indexing their payouts to state-level measures of farm activity. Consequently, most of these programs’ money goes to the agricultural centers in the middle of the country. All three of these programs miss out on high-impact conservation opportunities because they do not account for impacts on population centers, and they are biased towards states with high aggregate farm activity.
Despite their small size, New England farms provide invaluable services to their communities in the form of local socioeconomic vitality. The farm bill should make changes to its subsidy distribution system to reflect these non-economic benefits.
Opinion articles represent the views of their author(s), which are not necessarily those of The Dartmouth.
