Agricultural Policy and the US Food System

Agricultural policy structures how food systems operate. Policy supports food production, sets food quality standards, provides incentives for certain farming practices, and helps insure farms against crop losses.

In industrialized countries, food systems are extremely complex, requiring a high degree of cooperation between government agencies and the food supply chain. Unfortunately, poorly structured policies, even if well-intentioned, can create unintended consequences and impede changes that benefit farmers, animals, consumers, and the environment.

WHAT IS AGRICULTURAL POLICY?

Agricultural policy is an ever-evolving set of rules and agreements that mediate the relationships between the farming sector, the environment, and society. Governments around the world use policy to promote food and consumer safety, international trade, and the economic stability of the farming sector. Often accounting for a significant proportion of a country’s overall economy, the agricultural sector encompasses a broad range of farming activities, from growing trees to raising cattle, and is a significant source of employment both within the US and worldwide.

EXAMPLES OF AGRICULTURAL POLICY IN THE US

In the US, some fifteen federal agencies and departments are involved in enacting and implementing farm and food policy. The United States Department of Agriculture (USDA) and its sub-agencies form the largest and most influential federal policy-making entity within the food system. Others include the Federal Trade Commission, the Consumer Product Safety Commission, the Environmental Protection Agency, and the departments of Labor, Housing and Urban Development, Commerce, Defense, Energy, and Homeland Security.

The most significant agricultural legislation in the US is the Farm Bill, which shapes food production and distribution in the US and has international ramifications. First passed in the 1930s, the Bill expires every five to seven years and is subject to renegotiation ahead of its reenactment. The Farm Bill directs hundreds of billions of taxpayer dollars into farm subsidies for commodity crops, crop insurance policies, conservation programs, research and extension, and public food assistance. These programs have broad mandates that directly impact many fundamental aspects of American society.

AGRICULTURAL POLICY ISSUES

Agriculture and the governmental systems that regulate it are highly regionally specific. Different countries prioritize agricultural policy issues differently, taking approaches that reflect the socioeconomic and geopolitical forces that have shaped their history. Below are a few issue areas that are a regular focus of agricultural policy within the US.

TRADE

Much of US agricultural policy governs trade between the broader global food system and domestic producers and importers. This includes negotiating bilateral and multilateral trade agreements and establishing predictable and transparent trade standards and rules.

Trade supports US rural economies by providing markets for agricultural products, thereby creating jobs for farmworkers and generating economic opportunity for secondary farming businesses, such as farming infrastructure companies.

However, by negotiating trade agreements that benefit domestic agricultural entities at the expense of international producers and markets, some US agricultural policy decisions have intensified inequality, poverty, and food insecurity in other nations linked to the US through trade.[1]

ENVIRONMENT

Safeguarding the environment and the natural resources required for producing food is an essential issue for the agricultural sector. Particularly in an era of climatic instability, policies that promote sustainable farming practices are crucial.

In the US, examples include provisions of the Farm Bill that promote conservation agriculture, fund research and cooperative extension related to sustainable agriculture, reduce greenhouse gas emissions, and help farmers improve their impacts on water, land, and air. These programs represent the result of decades of lobbying by sustainability advocates. Unfortunately, many of these beneficial programs still remain siloed and underfunded, falling short of the sweeping measures that could transform US agriculture into a sustainable agricultural system resilient to the challenges of climate change.[2]

INNOVATION

Agricultural policy is responsible for regulating new technologies used to produce goods for human consumption. Farming technology has changed significantly in the last century, with far-reaching effects and mixed outcomes for society and the environment.

Gas-powered harvesters and other farm equipment have radically increased how much land a single farm operation can manage, making it possible to grow and harvest hundreds of acres of corn, soybeans, or wheat. Gene editing has created hybrid seed varieties that increase crop yields or make crops more resilient to drought and disease. Advances in biotechnology have given rise to synthetic food additives, novel agrichemicals, and genetically modified organisms that are often promoted as integral to domestic and international food production.

However, many of these innovations have also caused unintended consequences and considerable damage to the environment and human health—damage that requires policy solutions to resolve. Some technological frontiers in food and agriculture promise societal benefits such as resistance to diseases and improved climate resilience, while others intensify the dominance of corporate industrial agriculture, exploitation of animals, and diets reliant on unhealthy processed foods.

WHY IS REFORMING AGRICULTURAL POLICY IMPORTANT?

Agricultural policy structures economic relationships between agribusiness corporations, agricultural producers, and downstream food system businesses. These policies can have far-reaching consequences. Some US agricultural policies have provided societal benefits, while others have generated negative outcomes that are ripe for reform.

ADDRESSING FOOD SECURITY

One of the most important and successful components of the Farm Bill, is the Supplemental Nutrition Assistance Program (SNAP), aimed at alleviating poverty and food insecurity. Administered by the Food and Nutrition Service of the USDA, SNAP is the nation’s largest federal initiative for reducing hunger. The program provides billions of dollars of support each year to women and children in need, lower-income families, and the unemployed. SNAP is especially important during periods of economic downturn when many families would otherwise face hunger.[3] In 2015, SNAP successfully lifted nearly 5 million people above the poverty line through federal food assistance, including 2 million children and over 330,000 seniors.

INEFFICIENT USE OF TAXPAYER DOLLARS

Taxpayer subsidies have long shaped the American food system. Direct payments used to be made to farmers by the USDA to grow commodity crops like corn and soy. In the 1980s, these payments were shifted into crop insurance subsidies that pay farmers if yield or market prices end up being lower than anticipated at the time of planting. Through this model, the Federal Crop Insurance Program (FCIP) incentivizes farmers to plant crops that will result in the largest indemnity check rather than those that are the most beneficial for human or environmental health;[4] by one estimate, in 2016, roughly a quarter of US farmers’ net income was from subsidies. While intended to support US farmers and ensure a successful farming sector, the FCIP ultimately wastes both taxpayer dollars and resources that could be diverted into producing healthier, more sustainable foods.

DRIVING ENVIRONMENTAL DEGRADATION

FCIP payments exert a massive influence on the environment by influencing what crops farmers choose to grow. Intensifying the incentive to farm strategically with regard to indemnity payouts, farmers stand to gain the most from practices that make their farming more precarious, and more environmentally damaging. The Federal Agriculture Improvement and Reform Act of 1996 first allowed farmers total freedom to plant all their land with single crops while still receiving subsidies, increasing the dominance of profitable feed-grain crops such as corn and soy that continues today. By providing more funding to larger farms and discouraging practices like crop rotation that build healthy soil and mitigate risk, the FCIP incentivizes unsustainable large-scale monoculture farming. Together, the FCIP and the FAIR Act provide insurance payouts and taxpayer subsidies that outweigh any negative incentives from environmental degradation that would otherwise discourage many industrial farming practices

Monoculture industrial farming of corn can be particularly bad for the environment. Nitrogen fertilizers enable higher yields and faster growth, particularly for corn crops, which incentivizes farmers to apply these chemicals liberally in order to maximize profits.[5] Additionally, because wise use of fertilizers is not a basis for receiving subsidies, farms that overapply or have a history of overapplication of nitrates can still receive significant federal financial support.

Because cornfields are often left empty without a cover crop between plantings, excess nitrogen is lost into the air and water, resulting in widespread nitrogen pollution. Nitrogen loss has been estimated to cost the US $157 billion dollars annually—costs that are borne by taxpayers.[6]

SUPPORTING INDUSTRIAL ANIMAL AGRICULTURE

Policies designed to safeguard the environment are critical for strengthening US agriculture in the face of a changing climate, but even the most well-intentioned program can backfire or be weakened by the influence of powerful agribusiness interests.

Examples of conflicts of interest are evident in the industrial animal agriculture industry’s use of funding from the Environmental Quality Incentives Program (EQIP) to support highly polluting concentrated animal feeding operations (CAFOs). First enacted in 1996, EQIP was designed to financially incentivize historically underserved farmers—including lower-income farmers, Indian Tribes, and veteran farmers—to make environmental improvements to their properties and practices for the benefit of both the farms and their surrounding communities.

The 2002 Farm Bill allowed CAFOs to begin receiving funds from the EQIP program despite that these operations are among the most polluting of farming activities. EQIP funds began to be disproportionately directed towards CAFOs and away from smaller, underserved operations. One report found that between 2003 and 2007, the industrial animal agriculture industry secured at least $35 million every year through EQIP. Due to the severe constraints on accessing information from EQIP that were also implemented in the 2002 Farm Bill, it has been impossible for the public or policymakers to fully understand whether CAFOs are in fact using funds to address pollution issues and to what degree funds are being allocated toward infrastructure and expansion of CAFO facilities, including by adding more animals to already crowded farms.

WHAT IS THE NEWEST AGRICULTURAL POLICY?

Subsidies continue to play a substantial role in agricultural policy in the US. In addition to the FCIP, the Agricultural Risk Coverage Program and the Price Loss Coverage Program were included in the 2014 Farm Bill and cover the same price and yield drops as the FCIP. Then the Trump administration implemented two additional programs: the Market Facilitation Program, which addresses farming losses caused by increased tariffs imposed by China during the trade war, and the Coronavirus Food Assistance Program. According to the Environmental Working Group, which tracks farm subsidies, total payments from these newer programs skyrocketed to over $80 billion between 2014 and 2020—a figure that excludes the FCIP, which accounts for billions of dollars in additional payments.

Because farms with the largest acreage or yield production receive the biggest payments, the wealthiest farmers end up receiving the bulk of these subsidies despite the fact that these farms possess financial reserves allowing them to bear instability far more easily than smaller farms even without assistance. This unequal distribution of payments exacerbates the corporate consolidation of the farming sector.

The latest version of the Farm Bill was enacted into law in December of 2018 and will expire in the year 2023. The Bill made some notable improvements to farm policy. The largest federal conservation program, the Conservation Stewardship Program (CSP), increased payment caps for organic initiatives as well as funding for the collection of organic production data. The Bill also increased funding for sustainable practices, including cover crops and crop rotation, which can improve soil health and water quality. Farmers are also now allowed to insure diversified farms rather than monocrops, and programs were authorized that will aid in the development of local and regional seed varieties in order to provide increased resilience in the face of climate change.  

Unfortunately, the 2018 Bill continues to prop up the industrial animal agricultural sector. The Bill failed to close loopholes that enable CAFOs to benefit from EQIP funding and did not set limits to subsidies for CAFOs. Dairy farmers, accounting for significant greenhouse gas emissions, continue to benefit from subsidies. The Margin Protection Program for Dairy provides payments to farmers when the difference between the price of milk and the cost of animal feed falls below an expected dollar amount—prices that are changing already in part because of declining consumer demand for milk.

Despite some minor tweaks, the FCIP remains intact, helping to disincentivize more climate-friendly farming practices. The 2018 Farm Bill also committed to making severe long-term cuts to the CSP and EQIP of around $5 billion, which will reach beyond the next Bill’s enactment in 2023.

INTERNATIONAL AGRICULTURAL POLICY

Globalization in agriculture has profoundly impacted the world. Especially after the industrial revolution, agriculture became an increasingly global affair, with wealthier countries controlling natural resources worldwide to satisfy growing domestic consumer demand. In many places, small-scale and subsistence farming continues to be replaced by chemical-intensive industrial agriculture. The resulting proliferation of export-oriented crops rather than locally appropriate food crops brings negative local environmental impacts and increases food insecurity.[7]

Through policy, nations strive to ensure both domestic food security and economic productivity. Domestic agricultural policy incentivizing environmental stewardship can align economic success and food security with the goals of sustainability and health. Similarly, international agricultural policy focused on mutually beneficial standards and fair trade relations instead of tariff-free zones can secure domestic economic stability without damaging farming economies in other nations. Despite the potential benefits of aligning environmental and social goals with the economic structures of farming, agricultural policy has historically created agreements that benefit industrial producers and enrich some countries at the expense of others.

THE EU COMMON AGRICULTURAL POLICY

One example of international agricultural policy is the European Union’s common agricultural policy (CAP). Enacted in 1962, the CAP is designed to support a robust and sustainable agricultural sector. Nearly three-quarters of the CAP budget is devoted to supporting farmers’ incomes, with the remainder supporting rural development and maintaining stability in the face of price volatility and other challenges. The CAP is responsible for maintaining the EU as one of the world’s top food producers while also delivering environmental protection and benefits for wildlife and biodiversity within farming landscapes.

Yet as with other agricultural policies, the CAP carries drawbacks that can and should be resolved. As a report from the Transnational Institute notes, the CAP can result in the overproduction of certain commodities, which can depress prices and distort EU markets. The EU’s trade agreements also force lower-income countries to accept EU imports, which can impair smaller-scale farmers in other countries who cannot compete with the economies of scale achieved by farmers in the EU. Additionally, the EU imports a great deal of meat for human consumption, along with soy and corn to feed farmed animals in Europe. Imported meat and feed crops are often grown unsustainably in other countries and are linked to deforestation, displacement, and pollution.

CONCLUSION

Increased awareness of the looming climate crisis and global inequality provides hope that the US agricultural policy of tomorrow will advance social, environmental, and animal welfare priorities rather than international agribusiness interests. Agricultural policy that prioritizes equality, accessibility, and environmental stability could become the backbone of a sustainable agriculture transition.


[1] Bebbington, A. J. et al., “The impact of income, land, and wealth inequality on agricultural expansion in Latin America,” Proceedings of the National Academy of Sciences of the United States of America (2019) 116 (7) 2527-2532, https://doi.org/10.1073/pnas.1814894116

[2] Andrew J. Tanentzap et al., “Resolving Conflicts between Agriculture and the Natural Environment,” PLOS Biology 13, no. 9 (September 2015), https://doi.org/10.1371/journal.pbio.1002242.

[3] Julie A. Caswell and Ann L. Yaktine, eds., Supplemental Nutrition Assistance Program: Examining the Evidence to Define Benefit Adequacy (Washington, DC: National Academies Press, 2013), https://www.ncbi.nlm.nih.gov/books/NBK206907/.

[4] Kranti Mulik, “Subsidizing Waste: How Inefficient US Farm Policy Costs Taxpayers, Business, and Farmers Billions” (Union of Concerned Scientists, 2016), https://www.ucsusa.org/sites/default/files/attach/2016/08/Subsidizing-Waste-full-report.pdf.

[5] Marc Ribaudo et al., “Nitrogen in Agricultural Systems: Implications for Conservation Policy” (USDA Economic Research Service, September 2011), https://www.ers.usda.gov/webdocs/publications/44918/6767_err127.pdf?v=.

[6] Daniel J. Sobota et al., “Cost of Reactive Nitrogen Release from Human Activities to the Environment in the United States,” Environmental Research Letters 10, no. 2 (February 2015), https://iopscience.iop.org/article/10.1088/1748-9326/10/2/025006/meta.

[7] Raphael Lencucha et al., “Government Policy and Agricultural Production: A Scoping Review to Inform Research and Policy on Healthy Agricultural Commodities,” Globalization and Health 16, no. 11 (January 2020), https://doi.org/10.1186/s12992-020-0542-2.

About the author

Stray Dog Institute

To cultivate dignity, justice, and sustainability in the food system, Stray Dog Institute provides nonprofit allies with funding, strategic research, and opportunities for collaboration. Together, we hope to build a more compassionate world for people, animals, and the environment.

By Stray Dog Institute

About the Author

To cultivate dignity, justice, and sustainability in the food system, Stray Dog Institute provides nonprofit allies with funding, strategic research, and opportunities for collaboration. Together, we hope to build a more compassionate world for people, animals, and the environment.

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