OTTAWA — Most people have a favourite actor or a favourite hockey player. It’s more unusual to have a favourite agricultural economist, but Barry Goodwin has one that he especially likes.
“My favourite Canadian agricultural economist — Neil Young of Farm Aid. Save the family farm,” said Barry Goodwin, a professor of agricultural economics at North Carolina State University.
Goodwin’s line about the famous singer generated few laughs and many smiles at the Canadian Agri-Food Policy Conference, held in late January in Ottawa.
Young and musician Willie Nelson may believe that U.S. farm families are suffering and eating gruel for supper, but the facts don’t back that up, Goodwin said.
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Data from the Economic Research Service, a division of the U.S. Department of Agriculture, shows that farm households in America have much higher incomes than the average household in the United States.
On farms where farming and ranching is the principle occupation, the mean household income was $120, 259, or 151.7 percent of the mean household income in the U.S.
On top of taking in more income, farmers have much more wealth than the average American because they own land, equipment and other assets, Goodwin said.
He also presented a more stunning figure: 97 percent of farm households in the U.S. fall into the high income/high wealth category.
That fact doesn’t jibe with the images and information on the Farm Aid website. It has a photo of a farmer operating a 50 year-old-tractor with no cab and pulling a New Holland square baler that was probably built in 1976.
The Farm Aid website even solicits donations, asking Americans to contribute $25 to $100 so family farmers can “stay on their land.”
Goodwin said the Farm Aid mythology is powerful and has stuck in the public consciousness. However, perceptions are changing and U.S. politicians are starting to question generous federal subsidies for farmers and ranchers.
“Even state and farm newspapers are paying attention to the fact that these subsidies are rather extraordinary,” he said.
The Environmental Working Group, a non-profit, is helping to change the narrative.
The EWG website has comprehensive information on farm subsidies, broken down by state and commodity. It’s possible to look up subsidies for canola grown in North Dakota or get information on payment records for a particular farmer.
“Farmers hate that, but it does make it much more transparent,” Goodwin said.
“You can go look your neighbour up … and see exactly to the dollar what they’re getting.”
The EWG data must be having an impact because powerful people in Washington are speaking out against farm subsidies.
Joe Glauber, former USDA chief economist, wrote an opinion piece in The Hill in 2017 with the headline: “Reform our crop insurance program to reduce the burden on taxpayers.”
In it, Glauber calls for the elimination of a harvest price option program that costs $2.4 billion a year. Under that program, a producer receives payment if the harvest price is higher than the projected price for a commodity and if their yields were lower than expected. It’s been compared to “replacement cost” insurance.
As well, Senator Jeff Flake of Arizona has proposed legislation that would limit the federal government’s contribution to crop insurance premiums at $40,000 for an individual farm.
Goodwin doubts the legislation will pass, but it’s indicative of the changing mood in Washington around farm subsidies.
“I think the generosity of these programs and the fact that the farm sector is doing quite well is starting to be noticed by the non-farm segment of society.”
A few economists at the Ottawa meeting pushed back against Goodwin. One said the income of farmers shouldn’t be compared to average Americans. Instead, they should be compared to other businesses. Others said farmers take on lot of risk, so they should receive different treatment.
