On February 19, 2024, TCS staff held a roundtable with a group of eight farmers, livestock, producers, and others involved in the agricultural industry in northeast Nebraska to obtain their views on the next farm bill. Farmers and other stakeholders shared their expertise on what’s working and not working in U.S. Department of Agriculture (USDA) programs.

Roundtable participants discussed how various reforms to farm safety net programs, or their implementation at USDA, could benefit the next generation of agriculture, promote diversification in agriculture, help the environment, and benefit farmers’ livelihoods and long-term financial success. While some farm bill programs are meant to achieve these very goals, such as assisting beginning farmers, for instance, farmers and other stakeholders stressed that, as a whole, federal programs are failing to promote long-term prosperity in agriculture. Participants agreed that most farm subsidy payments are landing in the hands of a few very large farm operators, not average-sized farms or new or beginning farms they and their family members operate.

Farmers and other stakeholders shared the following sentiments, many which are supported by academic research (please note farmer-led policy reform ideas are identified in underlined text below):

• Impacts of farm subsidies on the ground: Farm subsidies and federally subsidized crop insurance, primarily benefiting large landowners, are pushing up the price of farmland. Discussion also centered on how farm subsidies received by large landowners increases cash rental rates. Cash rent is the amount a farmer pays to a landlord if they don’t directly own the land they’re farming. Participants agreed high land prices are a major obstacle for young and beginning farmers to enter farming, in addition to a barrier for average-sized farms to expand.
• Strong need for adequate payment limitations in farm subsidy programs: Need for strong, common sense payment limitations in farm subsidy programs, with payments tied to individual Social Security Numbers, to ensure nonfarmers and large operations are not receiving the vast majority of farm subsidies at the expense of other farmers.
• Lack of clear guidance on farm safety net program eligibility: As a whole, current farm safety net programs are not set up to assist or benefit beginning farmers. One farmer mentioned significant time spent filling out paperwork for one program when in fact a different program – a beginning farmer loan program – was better suited for their individual operation. The farmer felt the loan program, which they eventually qualified for, served them well but noted the stress of meeting regular loan payments.
• Complexity of farm subsidy programs and decision making: Decisions about whether farmers should enroll in one USDA farm subsidy program vs. another (specifically, decision about signing up for Price Loss Coverage – PLC – vs. Agriculture Risk Coverage – ARC) is sometimes left to crop insurance agents to help farmers navigate complicated programs. USDA’s Farm Service Agency (FSA) county offices administer these farm bill programs – not crop insurance agents. The complexity of farm subsidy decision making was noted, in addition to farmers attempting to maximize farm subsidy payments each year.
• Predictability and timeliness of farm subsidy payments: Participants noted that farm subsidy payments – through ARC and PLC, for instance – are issued after-the-fact, meaning bankers and lenders cannot assume these government payments will be in place prospectively to increase farmers’ bottom lines. These subsidy payments have not been predictable or stable in recent years, in terms of when they’re issued or the amount of overall subsidies paid.
• Proposals to shift conservation funding to crop insurance shallow loss program: In response to a question about shifting Inflation Reduction Act (IRA) conservation funding to more farm subsidies, particularly a county-based shallow loss subsidy program in the federal crop insurance program, one farmer noted his opposition. The farmer said that if their individual operation is going to purchase crop insurance (which is subsidized by taxpayers), they want it to be specific to their farm and their farm’s yield loss. The farmer made the point that they would not be interested in purchasing an insurance product that only paid out if their county experienced a loss, since this would not be tailored to their individual This is part of a broader discussion of taxpayer-subsidized programs at times paying farmers for losses that they never realized directly on their farm.
• Cutting conservation to fund more farm subsidies: Shifting IRA conservation funding to commodity and farm subsidies was not supported by farmers and other stakeholders in the room. No participants reported applying for IRA conservation funding to date.
• Carbon credit programs: Participating farmers have not signed up for agricultural carbon credit programs due to a lack of adequate financial benefits and the fact that most farmers in the area are already implementing conservation practices that the programs are incentivizing, such as no-till.
• State tax incentive programs: Farmers were unaware of anyone who participated in Nebraska state tax incentive programs for beginning farmers, with the exception of one stakeholder.
• Livestock consolidation and lack of farm diversification: Farmers stated that years ago, many farms (medium- to larger-sized farms) had livestock, such as hogs, cattle, dairy, or others. Now, many of these producers no longer raise cattle, for instance, due to them not being able to receive competitive prices from buyers, in addition to difficulty in finding a buyer to purchase their cattle to begin with. This challenge was attributed to inadequate implementation and enforcement of the Packers and Stockyards Act, which was meant to ensure independent farmers have a level economic playing field in the livestock industry. As a result, a local farmer believes opportunities for the next generation of agriculture are limited with diversification from raising livestock not an option for as many operations.

In conclusion, roundtable participants questioned whether farm subsidy programs and other policies are meeting goals of furthering opportunities for the next generation of agriculture, among other priorities. Participants noted how farm subsidy programs are furthering farm consolidation and pushing out opportunities for beginning farmers to get a foothold in farming.

It’s not all doom and gloom, however. Some simple efforts could benefit farmers, including clear information on which federal programs different farmers are eligible for. In addition to the policy reforms farmers voiced (above), roundtable participants also expressed interest in the following reforms. These policy reforms, if implemented, could reduce obstacles for beginning farmers to get started in agriculture in addition to reducing our nation’s spending. Policy reforms, or a combination of them, could also help promote resilience to future droughts, floods, and other challenges facing farmers and ranchers.

Policy Options/Recommendations

• Farm subsidy phase-out: Phase out farm subsidies for individual farmers over time. Agricultural producers could receive crop insurance premium subsidies for 10 years, for instance, but would receive a lower subsidy rate or amount each year. Other option is to eliminate farm subsidies altogether, as voiced by one farmer.
• Farmer savings accounts: Openness to learning about other farm safety net options, such as farmer savings accounts, which are used in countries such as Canada. Farmer savings accounts could help promote financial savings in good years and allow farmers to pull money out of savings accounts during years of drought or lower profit margins, for instance. Savings accounts could also help reverse the current practice of spending down income each year to reduce tax liability.

As policymakers determine the future of farm safety net programs, TCS urges them to listen intently to farmers, ranchers, and other stakeholders directly involved in agriculture to ensure policies and programs are achieving intended goals and promoting opportunity for the next generation of agriculture.