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Agricultural Subsidies for Non-farm Interests: An Analysis of the US Agro-industrial Complex

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  • Thiago Lima

Abstract

The article argues that the US agricultural subsidies are sustained by a coalition of forces larger than is normally asserted by mainstream analysis. Using the concept of agro-industrial complex, the article sustains that subsidies are a state policy intended to keep farms functional. The subsidies push farmers into a technological treadmill, an economic dynamic by which farmers must keep investing in expensive inputs and expanding scale. All this investment and expansion makes farmers highly indebted and places downward pressure on the price of commodities, creating a tendency that, if it were not for the subsidies, would probably lead to bankruptcy. A generalized farm bankruptcy would be a grave setback for many interests: input suppliers, commodity merchants, food suppliers, landowners, banks and the state itself, among others. Thus, agricultural subsidies should be seen through a broader political economy perspective, not one that traces subsidies only to the connections between farm interest groups and key members of Congress.

Suggested Citation

  • Thiago Lima, 2015. "Agricultural Subsidies for Non-farm Interests: An Analysis of the US Agro-industrial Complex," Agrarian South: Journal of Political Economy, Centre for Agrarian Research and Education for South, vol. 4(1), pages 54-84, April.
    • Handle: RePEc:sae:agspub:v:4:y:2015:i:1:p:54-84
    DOI: 10.1177/2277976015574799
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    References listed on IDEAS

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    1. Barry K. Goodwin & Ashok K. Mishra & François Ortalo-Magné, 2011. "The Buck Stops Where? The Distribution of Agricultural Subsidies," NBER Chapters, in: The Intended and Unintended Effects of US Agricultural and Biotechnology Policies, pages 15-50, National Bureau of Economic Research, Inc.
    2. Levins, Richard A., 2001. "An Essay On Farm Income," Staff Papers 13559, University of Minnesota, Department of Applied Economics.
    3. William Coleman & Wyn Grant & Tim Josling, 2004. "Agriculture in the New Global Economy," Books, Edward Elgar Publishing, number 3331.
    4. James T. Bonnen & David B. Schweikhardt, 1998. "The Future of U.S. Agricultural Policy: Reflections on the Disappearance of the "Farm Problem"," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(1), pages 2-36.
    5. Nickerson, Cynthia & Morehart, Mitchell & Kuethe, Todd & Beckman, Jayson & Ifft, Jennifer & Williams, Ryan, 2012. "Trends in U.S. Farmland Values and Ownership," Economic Information Bulletin 291935, United States Department of Agriculture, Economic Research Service.
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