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January 2001, Volume 7, Number 1

US Farm Policy

President-elect George W. Bush nominated Ann M. Veneman to be Agriculture Secretary, making her the first female USDA leader and marking a break from the usual practice of having a Midwesterner lead USDA. USDA has about 100,000 employees and a $72 billion annual budget.

Farmers received a total $28 billion in government payments in 2000 , and government aid represented half of US farmers' income. Direct payments to farmers have tripled since 1996, when "Freedom to Farm" legislation was enacted that was supposed to reduce government payments to farmers. In 1999, 1.6 million farmers received an average of more than $13,000 each in government money.

Chouteau County, Montana, "the birthplace of Montana," has 5,000 residents, and received $51 million in direct farm assistance, $10,000 for each resident. Most of the farmers grow wheat, 90 percent of Montana's wheat is exported, but subsidies are required to export the state's wheat because the cost of production in Montana is higher than the world price.

The New York Times on December 24, 2000 noted that "Farmer dependence on federal money is even higher now, in both percentage terms and real dollars, than it was at the depth of the Great Depression…[so that] federal subsidies in the United States - like those in much of Europe - are not so much about food supply anymore as they are about keeping the least-populated parts of the country afloat." Outgoing USDA Secretary Dan Glickman says that "farm payments have become truly rural support payments."

In 1997, there were 1.9 million US farmers, and the largest 17 percent accounted for 83 percent of the value of farm commodities produced. The number of farms operated by families remained at about 85 percent from 1978 to 1992. However, their share of output dropped from 62 percent to 54 percent. Religious minorities such as the Amish have traditionally been farmers, but at least half of the Amish in Lancaster county, Pennsylvania are now non-farmers.

Trade. A coalition of states that grow most US fruits and vegetables- NFACT or New Mexico, Florida, Arizona, California and Texas- held hearings around the US to obtain views on the new farm bill, slated for debate in Congress in 2001. California growers in November 2000 told the panel that they wanted country-of-origin labels to be required on fruits and vegetables, so that consumers know that US-produced fruits and vegetables are produced with higher environmental standards and wages.

A raisin packer in Fresno called for "equalization tariffs" for imports of produce to reflect fewer environmental controls and lower wages. US farm exports are projected to be $50 billion in 2000, and imports $39 billion; the imports include about $16 billion worth of fruits, vegetables and other horticultural commodities.

Many farmers are becoming electricity generators, earning up to $2,000 a year to permit a 200-foot tall turbine to occupy about one-eighth of an acre of land. Wind now supplies about one percent of US energy needs, but many Midwestern states have the potential to become major generators.

Assessments. Growers of many commodities assess or tax themselves a small fee for each unit they produce to do research and promote the commodity they grow; a total of about $1 billion is collected each year. The US Supreme Court in 1997 ruled 5-4 that the First Amendment rights of growers required to pay assessments to support research on and promote the commodities they grow were not violated by requiring growers to pay assessments (Glickman vs. Wileman Bros). The Supreme Court held that mandatory assessments were more like economic regulation than free-speech.

The US Supreme Court will hear a challenge to mushroom assessments in 2001. Congress in 1990 authorized establishment of the mushroom marketing order, which collects fees from 150 commercial mushroom producers nationwide to advertise mushrooms. Tennessee-based United Foods Inc, which also has production facilities in California, has refused to pay the assessments since 1996.

The California Supreme Court heard arguments in September 2000 on Gerawan Farming vs. Veneman, in which Gerawan argued that state-mandated assessments due to the California Plum Marketing Board for generic advertising were an unlawful interference with free speech. California has 51 marketing orders, councils and commissions that levy assessments on the growers of a wide range of commodities for marketing purposes as well as research. Gerawan lost a challenge to the plum board in the 5th District Court of Appeal in Fresno.

California has 51 marketing orders, councils and commissions that levy assessments on the growers of a wide range of commodities for marketing purposes as well as research. Gerawan lost a challenge to the plum board in the 5th District Court of Appeal in Fresno. The US Supreme Court will hear a challenge to mushroom assessments in 2000-01; Tennessee-based United Foods Inc has refused to help finance generic ads for the mushroom industry since 1996.

The federal government's Market Access Program provides taxpayer funds to promote the export of US farm commodities. The San Francisco-based Wine Institute received $100,000 in MAP funds to promote exports of California wine, usually by inviting foreign wine writers to visit and tour wineries in the state.

The International Food, Wine and Travel Writers Association has a Code of Professional Conduct stating members "shall use the most severe efforts to avoid compromising recognized journalistic ethics in the area of receiving complimentary food, lodging, travel or related items," but the Fresno Bee reported on December 25, 2000 that the Wine Institute had no problems finding wine and food writers eager to accept free or subsidized trips.

Water. There are about 600 farmers irrigating 540,000-acres to produce crops worth $1 billion a year in the Westlands Water District. In August 2000, Westlands filed an application for one-third of the flow of the San Joaquin River -- a waterway that has been used almost exclusively for 50 years to irrigate east San Joaquin Valley farms. The State Water Project's two biggest customers - Metropolitan Water District of Southern California and the Kern County Water Agency -- are not supporting Westlands.

Westlands says its battle is really with the U.S. Department of Interior, which manages the federal Central Valley Project. Westlands says it is entitled to 1.15 million acre feet of CVP water a year, but received that much only twice in the 1990s. The CVP reduced allocations to farmers for environmental reasons in the 1990s, and has said that Westlands can expect about 750,000 acre feet in normal precipitation years.

The U.S. Bureau of Reclamation, which operates the CVP, reached a 25-year agreement with 25 water districts united under the Friant Water Users Authority to provide water to 15,000 East San Joaquin Valley farmers. Under the 1992 Central Valley Project Improvement Act, they pay $15 to $30 an acre foot for water, which includes $7 an acre foot for fish and wildlife restoration. Most of the Friant Water comes from Millerton Lake, not the Sacramento-San Joaquin river delta.

Agri-tourism. There are many boosters of agri-tourism, attracting customers to farming areas to pick or simply buy farm produce. The major agri-tourism areas of California include Napa Valley for wine tasting and Apple Hill for apple purchases.

Tourism to see animals that were once hunted for food and fuel is already a booming business. The International Fund for Animal Welfare reported in August 2000 that five million people in 87 countries travel to look for migrating whales, spending $1 billion a year; about half are in the US.

The largest US food retailers include Kroger Co, Safeway, and Albertson's Inc. Safeway has 1,700 stores in the US and Canada, including 500 in California, has 200,000 employees and annual sales of about $30 billion.

Michael Doyle, "U.S. Supreme Court will hear the case over sharing fees for promotions," Fresno Bee, January 4, 2001. Michael Doyle, "USDA helps pay for promotional trips to California by foreign wine writers," Fresno Bee, December 25, 2000. Timothy Egan, "Failing Farmers Learn to Profit From Federal Aid," New York Times, December 24, 2000. Melinda Fulmer, "Desert Farmer Taps Into Global Markets," Los Angeles Times, October 8, 2000.