Policy Studies Insurance

The Unbridled Potential of the Future Farm Economy

by Nan Swift

Dec 7, 2023

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Author

Nan Swift

Resident Fellow, Governance Program

Key Points

Federal farm subsidies impede the widespread adoption of new, innovative technologies and methods.

Federal farm subsidies create an uneven playing field in the agriculture industry, favoring increasingly dated, traditional business models and farming practices.

Reducing subsidies could trigger an agricultural renaissance, resulting in more resilient farm businesses, reduced environmental collateral and much-needed savings for taxpayers.

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Executive Summary

For the last 20 years, median farm households have reliably out-earned other households in the United States. A century ago, this kind of consistent abundance would have been a thing of dreams for hardscrabble farmers on the precipice of the Dust Bowl and economic disaster.

To get here, though, a significant toll was imposed: an overly generous farm safety net. This safety net has subsidized farmers’ success, but it has done so at the expense of our national debt, environment and innovation.

The first paper in this two-part series, “The Shaky Foundations of Modern Farm Policy,” demonstrated that modern farm policies are outdated and ineffective, having been developed to address historic farming challenges that differed markedly from the challenges farmers face today. This second paper asserts that the current farm economy has the stability to support reform and explains how current farm policies are hindering the innovation needed to better support tomorrow’s farm economy. It also includes two case narratives to highlight examples of innovative farm technologies that might be more widely adopted if federal subsidies were reformed to encourage agribusinesses to take on more of their own risk and seek new ways to be competitive.