Trump's 'Big Beautiful Bill' Would Boost Subsidies for Rich Farmers
Subsidies inherently skew the market, and farm subsidies are no different.
It should be clear by now that, despite the assurances from President Donald Trump and his allies in government, the One Big Beautiful Bill Act—which passed the U.S. House of Representatives last month—not only won't reduce the federal budget deficit but will in fact increase the nation's debt load by $2.4 trillion over the next decade.
Given that Trump came into office promising to cut federal spending, it's worth looking at how Trump's bill does the opposite of what he and other Republicans say it does. And one of the more egregious things it does is boost corporate welfare for wealthy farmers.
"The government provides agricultural subsidies—monetary payments and other types of support—to farmers or agribusinesses," says the U.S. Department of Agriculture (USDA). "While some subsidies are given to promote specific farming practices, others focus on research and development, conservation practices, disaster aid, marketing, nutrition assistance, risk mitigation, and more."
"In reality, this support is highly skewed toward the five major 'program' commodities of corn, soybeans, wheat, cotton, and rice," according to the Environmental Working Group (EWG), an environmental advocacy organization. "Despite the rhetoric of 'preserving the family farm,' the vast majority of farmers do not benefit from federal farm subsidy programs and most of the subsidies go to the largest and most financially secure farm operations."
The new bill will only make the problem worse: According to an analysis by the American Farm Bureau Federation, the bill "would increase agriculture-facing programs spending by $56.6 billion over the next decade," of which "$52.3 billion is tied to enhancements in the farm safety net."
That "farm safety net" comprises most agricultural subsidy spending in any given year. It includes price and revenue guarantees for certain crops, ensuring farmers earn a set minimum on staples like corn and soybeans, as well as crop insurance assistance, covering up to 60 percent of farmers' insurance premiums in the event of price declines or poor harvests.
The programs are a bad deal for taxpayers—indeed, for anybody but the very wealthiest agribusinesses. "Just in the last 10 years, crop insurance agents and the 14 companies the USDA allows to sell and service crop insurance policies…received almost $33.3 billion from the federal Crop Insurance Program," EWG Midwest director Anne Schechinger wrote in 2023. "In some years, up to one-third of crop insurance payments are made to companies and agents, not farmers."
The new bill would make the program even more generous, tying payouts to inflation and putting taxpayers on the hook for even more insurance company operating costs.
The bill would also increase the price minimums for many staple crops, though the increases for those grown in southern U.S. states go up exponentially: While corn would go up by 18 percent, and wheat and soybeans by more than 70 percent each, minimum prices for seed cotton, peanuts, and rice—grown primarily in the southern states—would each more than double, with the minimum price of rice going up 185 percent.
Price minimums inherently distort the market, causing farmers to prioritize favored crops even if others would be better suited to the growing conditions—after all, if you're guaranteed a minimum price for what you sell, and you're covered for what doesn't grow, what do you have to lose?
At the same time, "subsidies increase land prices, which benefits wealthy landowners at the expense of the many farmers who rent," writes Nan Swift of the R Street Institute. "Young farmers can't afford to rent or buy land at inflated prices. Likewise, young farmers often have smaller farms that don't benefit from the primary federal subsidy programs."
Not only does the "Big Beautiful Bill" keep these programs intact, it expands them; it even introduces an "insurance pilot program" for "poultry growers."
"The farm subsidy increases in the reconciliation bill are brazen. The GOP lavished the biggest subsidy increases on GOP parts of the country," writes Chris Edwards of the Cato Institute. "More importantly, in a supposed spending reform bill, the GOP doesn't just spare millionaire farmers from cuts, they aggressively expand inefficient farm giveaways by $57 billion."
