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There is a widespread misconception that farmers are much poorer than most Americans. But most farming is done on large corporate farms, not family farms, and most farmers, on the whole, are better off than the popular misconception allows. As a Department of Agriculture report states, “On average, farm households have higher incomes, greater wealth, and lower consumption expenditures than all U.S. households.” Specifically, farmers earn incomes 17 percent above the national average and report net worths well above the national average. In 1999, the 136,000 households with annual farm sales of more than over $250,000—the group that receives the largest farm subsidies—reported an average income of $135,397, or two-and-a-half times the national average. By no means a faltering industry, the farm industry suffers a failure rate just one-sixth the rate for non-farm businesses. Still, taxpayers subsidize (mostly large) farms with between $15 billion and $30 billion annually.
In addition, subsidies harm farmers because they simply make no economic sense. Farm policy is based on the premise that a surplus of crops has lowered crop prices too far and farmers need subsidies to recover lost income. The federal government's remedy is to offer subsidies that increase as a farmer plants more crops. Planting more crops, however, only leads to greater crop surpluses, driving prices down even further and spurring demands for even greater subsidies. Then, while paying some farmers to plant more crops, Washington turns around and pays other farmers not to farm 40 million acres of cropland each year. The economic illiteracy exhibited by farm subsidies is stunning even by government standards.
Source: The Heritage Foundation