Subsidies for Beginning Farmers: Should We Bet the Farm?

Key Points

• The average age of principal farm operators has increased from 50.3 in 1978 to 59.4 today, raising concerns about challenges preventing young people from owning and operating farm businesses.
• The Inflation Reduction Act introduced several programs that would benefit both new and not-so-new farm owners and operators—farmers with less than 10 years of experience—that include loan debt forgiveness, insurance fee exemptions, and other programs intended to offset the challenges of acquiring land and other equipment.
• Paradoxically, however, farmland prices are higher, and therefore barriers to entry are larger, because of the wide array of federal subsidies available to all farmers, which increase their revenues and profits.

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In my younger days, I was obsessed with the NFL, certain that this obsession would lead me to a career as a starting quarterback in the league. Alas, my physical stature and abilities were just not strong enough to see this ambition become a reality. Further, unlike several programs for new and beginning farmers, there were no government subsidies in place that would help me achieve my ambitions, which from a societal perspective, given my innate physical abilities, was a good thing.

Secretary of Agriculture Thomas Vilsack has stated that it is crucial to encourage beginning and new farmers to enter farming, using the aging US farm population as a major rationale for such initiatives. Certainly, in the United States, farm owners and managers are generally older than they used to be, and the average age of farm operators in the US is now approaching 60 years. The US Department of Agriculture (USDA) agricultural census reported that the average age for a principal farm operator was 50.3 years in 1978, 53.3 years in 1992, 57.1 years in 2007, 58.3 years in 2012, and now 59.4 years.¹ But many commenters fail to ask the relevant question, which is why farm owners’ and managers’ ages have increased, and just assume it is a bad thing.

Secretary Vilsack simply argues that encouraging young and “socially disadvantaged” individuals to enter farming will result in a “vibrant local and regional food system that is more resilient than the system we had as exposed by the pandemic” and improve “economic opportunity in rural communities and small towns.”² There is no systematic evidence that any of these claims are true, at least with agricultural productivity. Further, the decline of rural populations in many regions has been linked to technical innovations and changing labor market conditions that have reduced the need for farm labor and substantially increased farm size. Nevertheless, the secretary’s claims reflect views about US agriculture and rural communities that are widely expressed by many casual commenters, leading to a wide array of federal subsidy programs at least notionally intended to redress the aging population problem.

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Notes

1. US Department of Agriculture, National Agricultural Statistics Service, “Census of Agriculture,” https://www.nass.usda.gov/AgCensus.
2. See Jared Strong, “USDA Plans ‘Historic’ Funding to Help Struggling Farmers and Develop New Ag Leaders,” Iowa Capital Dispatch, August 24, 2022, https://iowacapitaldispatch.com/2022/08/24/usda-plans-historic-funding-to-help-struggling-farmers-and-develop-new-ag-leaders.