They’re regressive.

Ultimately, Congress should end all farm subsidies. Businesses in other industries face many risks and market fluctuations, yet they prosper or fail depending on their own skill and planning without a federal subsidy cushion. Farm businesses face some unique risks, but so do other businesses. Consider, for example, the fast pace of change in technology industries, or the large price fluctuations in the mining and energy industries.

The following sections discuss why farm subsidies make little sense.

1. Subsidies Redistribute Wealth Upward. Farm subsidies go mainly to high-earning households. The average income of all farm households was $117,918 in 2016, which was 42 percent higher than the $83,143 average of all U.S. households.26 The same year, the median income of farm households was $76,250, which was 29 percent higher than the U.S. median of $59,039.

Farming incomes are down somewhat in recent years as crop prices have dipped from unusually high levels between 2011 and 2013. But the ratio of average farm household income to the average income of all U.S. households has been trending upward since at least 1960.27

Those income measures are for all farm households, but Congress delivers the bulk of subsidies to the largest and wealthiest farm households. A recent analysis by AEI scholars found that 60 percent of subsidies from the three largest programs (insurance, ARC, and PLC) go to the largest 10 percent (by sales) of farms.28

The AEI scholars found that the largest farms were more intensely subsidized than smaller farms. Looking at the crop insurance program, for example, they found that the top 10 percent of farms received subsidies of $29 per acre, compared to an average of $12 per acre for all crop farmers.

The high-end concentration of farm payments has increased over time. A recent USDA study found that "in 1991, half of commodity program payments went to farms operated by households with incomes over $60,717 (in constant 2015 dollars); however, in 2015, half went to households with incomes over $146,126."29 The study found similar increases in the high-end concentration of crop insurance subsidies and conservation subsidies.

Politicians often claim that farm aid helps alleviate rural poverty. But farm aid goes to farm owners, and they have relatively high incomes. Just 2 percent of farm households fall below the poverty line, compared to 14 percent of all U.S. households.30 Also, USDA data show that while less than one-third of farms with revenues of less than $100,000 received federal subsidies, three-quarters of farms above that threshold did.31

At the top end, many billionaires have received farm subsidies over the years. Looking at the period from 1995 to 2014, the Environmental Working Group (EWG) found that 50 people on the Forbes 400 list of the wealthiest Americans received farm subsidies.32 Today, the largest pot of subsidies is channeled through insurance companies, which hides the identities of recipients, as noted.33 However, the Government Accountability Office found that at least four recipients of crop insurance subsidies have a net worth of more than $1.5 billion.34