

U.S. farmers faced big challenges in 2020. Problems included trade disputes, low prices, and severe weather. Yet farmers ended the year with their highest net income in seven years. Where did all that cash come from?
In actual dollars, farm income is at its lowest in more than a decade. But in 2020, federal government subsidies equaled nearly 40% of farmers’ income. That was a 107% increase over 2019.
A subsidy is money given by a government to help a business keep the price of a product or service low. Low prices allow consumers to afford basic goods like milk or gas or services like housing or education.
Subsidies can also keep a struggling industry afloat. In 2008, the federal government funded the banking and automobile sectors. It did so to protect millions of jobs and prevent serious economic collapse.
Farmers, who must “[wait] for the precious fruit of the Earth” (James 5:7) and deal with the whims of weather and politics, often get government subsidies too. The subsidies help pay for supplies, equipment, and labor.
But subsidies have a big downside. They allow prices to go down. Low prices usually increase demand. Producers then sometimes can’t maintain the supply. That can cause a goods shortage. The shortage can trigger even greater demand, which can result in price increases. See the vicious cycle?
Not counting U.S. Department of Agriculture loans and insurance payments, farmers received over $46 billion in government subsidies in 2020. That’s the largest direct-to-farm subsidy total ever.
The impact of the farm subsidy varies from one farm to another. “The payment to one farm could be a matter of life and death of that farm and for another farm maybe just makes it not quite as bad of a year as it was going to be,” says farmer Mike Paustian.
Some farmers would have difficulty making ends meet without federal aid.
But Rick Juchems tells a different story. He grows corn and soybeans and custom raises hogs. “At first [the money] did help,” Juchems says. “But then we kept getting payments, and I don’t know that those were warranted.”
How does the government finance subsidies? It doesn’t. Citizens do—in the form of taxes. Taxes provide funding to dole out to farming and other industries. Those relief checks everyone gets excited about? (See “Congress Votes on Relief Bill” at teen.wng.org/node/6569. ) They’re a form of subsidy that will come out of working citizens’ pockets.
Lawmakers and economists have argued about subsidies for centuries: Would you rather pay more for groceries . . . or pay the government to subsidize the farmer?
1st comment!!!!
interestering
??????
i dont get it. whats happening?
?????????????????????????????
????????????????????????????????
Same here.
4th comment
I got 3rd+4th comment!
@ Desarose and Caden
So, basically, the Government gives farms money to keep cost of products low. That means that consumers can afford things. Also, it helps keep millions jobs and the economy won't collapse. It has downsides too though - less prices mean more demand and the farmers can't keep up with the demand of products, meaning a shortage which results in higher prices. That creates a circle, then. But the money that the Government gives comes from peoples taxes, so people have wondered whether they would rather pay more for groceries or pay more taxes so the Government can give money to farmers?
5th comment
I am in a farming family (hey there have been a lot of farming articles on here these two months! Cool!) anyway I am in a farming family, but I am not sure if we get these or not. Maybe we do. I don't know. We grow corn, milo, wheat, and barley. Most of it goes for animals, but then those animals go for people to eat. So yeah I would say pay for taxes for farmers I guess. We homegrow a lot of things in our garden and butcher our own cattle, so we don't get meat from the grocery store except chicken. We butchered a bunch of roosters we had one time and well they were really tough! XD So we don't get beef, eggs, milk, or fresh vegetables in the summer. Because we can grow vegetables in the garden in the summer... So yeah anyway. ..