Supporting Animal Agriculture: Your Tax Dollars At Work
The U.S Department of Agriculture (USDA) spends approximately $2 billion annually to purchase farm commodities. Of this, $200-400 million are “discretionary surplus” purchases. These purchases vary in response to market and political conditions and so they do not have to meet program goals or fit into funding formulas. Indeed, these surplus purchases say much about the health of various animal agriculture sectors and their influence on the USDA.
To gain more insight into this program, researchers examined 10 years of surplus purchase data. They also looked at the trade mitigation purchases made in response to the trade war instigated by the Trump administration in 2018. Surplus purchases are initiated by groups with economic interests in particular commodities. The USDA reviews each request and considers a variety of factors: it looks at its previous history of support for the industry, the amount requested, economic conditions in the industry, inventory levels, and price trends. It also forecasts the potential impact of the purchase.
Between FY2010 and FY2019, the USDA spent almost $2.6 billion on surplus commodities. About two in every five dollars (41%) went to animal agriculture. Indeed, outlays for beef, catfish, cheese, chicken, eggs, lamb, milk, pollock, pork, salmon, and turkey products were almost twice as high on average as those for fruits and vegetables. The chicken industry received the most support in terms of both frequency of and dollar purchases. According to the National Chicken Council, consumer preference for white over dark meat caused an imbalance and left too much dark meat in cold storage. This created economic hardship and required payments from the surplus program.
Furthermore, surplus purchase dollars often funded industries that failed to behave efficiently — several animal agriculture sectors received payments repeatedly over just a few years, and the catfish industry was particularly notable in this regard. The dairy industry only became eligible for surplus program support in 2014, but has availed itself of these payments almost every year since. This is problematic because these payments are not designed to be an extended form of support, never mind a back door subsidy.
In 2018, the Trump administration started an international trade war. Several countries retaliated with tariffs on U.S. agricultural imports. To protect the finances of domestic farmers, the USDA set up three trade war mitigation programs. A total of $28 billion in aid was authorized. By the end of the Trump administration, total payments delivered were equal to 40% of all 2020 farm income. And evidence suggests that some industries, including dairy and pig producers,were overpaid for their losses. Indeed, it appears that pig farmers, who received over $1 billion, were made more than whole from trade mitigation payments.
On the heels of the trade war, the coronavirus pandemic struck. The USDA stepped in again, with economic support through the Food Assistance Program (FAP). Rather than providing broad relief, however, most of these FAP funds went to the top 1% of farms. This group received 22% of all FAP payments, compared with 23% for the bottom 80% of producers.
In 2021, the Biden administration created another support program that expanded support payment eligibility to dairy farmers and contract poultry growers. This new program also compensated meat producers who were forced to kill millions of animals because they could not bring them to market. These supply chain disruptions were devastating for animal welfare, and yet farmers still received pandemic assistance no matter how inhumane their culling methods.
Study authors offer advocates several ideas on challenging current practices. For example, the USDA may be violating the statutory funding caps with some of the payments to animal agriculture industries. Agency staff actively works with entities seeking to receive payments, but there seems to be no process in place to ensure that funds are distributed fairly. These are just two issues where advocates could voice their concerns and seek changes. Farmers outside of animal agriculture should have an equal opportunity for government support, and advocates can help to make that happen.