A bias toward large agriculture operations

Posted 3/11/20

As the tariff battles between Washington D.C and Beijing played out over the past two years, the United States Department of Agriculture (USDA) has provided some $28 billion of aid to farmers. The …

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A bias toward large agriculture operations


As the tariff battles between Washington D.C and Beijing played out over the past two years, the United States Department of Agriculture (USDA) has provided some $28 billion of aid to farmers. The aid was linked to the acreage of individual operations, which led critics to say the USDA is biased in favor of large farms over small family farms.

A year ago, Rep. Antonio Delgado urged Secretary of Agriculture Sonny Perdue to try to do more to help small family farms—especially dairy farms which have been struggling for many years. Perdue responded at the time, “These are economy-of-scale issues that impact the entire economy, not just agriculture. And the economy of scale for a small dairy is going to be extremely difficult going forward, even with the new Farm Bill. I don’t think any of us would submit that we’re compelled to keep anyone in business if it is not profitable.”

Yet, the $28 billion in aid that went to large farming organizations over the past two years went to some farms that may not have been able to turn a profit or stay in business without the federal aid. Delgado had a chance to question Perdue again at a hearing on March 4; he asked specifically about small family farms.

Delgado: In 2019, we saw the largest decline in dairy operations in more than 15 years. I believe that priorities dictate policies, and when it comes to your agency’s priorities, I’m concerned that we’re not seeing the kind of recalibration needed to prioritize and assist our small farms. So my question is what, if any, plans is USDA considering to provide assistance to and create new market opportunities for our small family farms?

Perdue: Well what we see most effective is value-added  grants… the dairies that are surviving, particularly the smaller dairies, are more successful when they add processing there and creameries. We’ve been losing dairy farms for a number of years. Sadly, the cows are—a number of cows, a number of dairies—are down but the milk production is up. That’s really the challenge. That’s why we see the continued price pressure that makes it very difficult for smaller dairies. I was visiting with the organic dairy providers the other day and many of them have small producers. There’s a large organic dairy co-op that has a lot of smaller producers, a lot of cows under herd number 75, which is a very small dairy today. So, they’re taking those kinds of actions to do that. The fact remains that the economy of scale with the equipment, land, cows and others—it’s a very difficult economic challenge to do that.

At another point, Delgado asked about the larger farms that got the aid over the past two years.

Delgado: Would those farmers be profitable but for the trade aid in 2019?

Perdue: Many of them would not…

Delgado: Right, but then you said…

 Perdue: The bigger you are the harder you fall. The losses would be a lot more.

Delgado: Understood. But to be clear, you’re on record saying that keeping farms in business that aren’t profitable is not really the focus. Right?

Perdue: Say again, I’m sorry.

Delgado: You’re on record. I believe you said, you’re not compelled to keep anyone in business if it’s not profitable.

Perdue: I think again we have to recognize that farming is a business and you have to make a profit. That’s why my answer to the question was the profitability of agriculture…

Delgado: Totally understand. I’m saying that as you make that decision, it appears you’re prioritizing the big farmers over the small farmers who aren’t making a profit.

Perdue: I would disagree with that. We’re at no bias towards large or small. It’s a matter of the fact the larger you are the more you are eligible for those payments.

This space has said for years that, because the price of milk is set by the federal government, officials could come up with a pricing formula that would help small family dairy farms survive. Perdue’s comments reflect the reality that has been in place for many decades. While Delgado clearly does want to help the small dairy farms in his district, not enough of his fellow lawmakers in Washington care enough about the issue to make it a priority.


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