The United States

Throughout most of its early history, the United States did not subsidize agriculture. A nation largely founded by farmers and land workers held agriculture in high esteem, but was determined that no other group should be taxed to fund another. However, the Great Depression of the early 1900s and the presidencies of Hoover and Roosevelt reversed this. Hoover established the Federal Farm Board which fixed market prices for certain produce, inducing excess production of the supported items. Roosevelt supported the Agricultural Adjustment Act (AAA), which paid farmers not to produce in order to reduce agricultural surpluses.

In 2019, OECD data show that the United States provided agricultural support of over US$48 billion, however, close to half of this was in the form of support to consumers through nutrition assistance programs. Federal support to agriculture has shifted and changed with various administrations, with the five-year Farm Bill being the primary legislative vehicle used to implement changes to the “farm safety net“, including government subsidies.

Under the rules of the WTO the United States, along with other developed countries, agreed to set limits on spending. The US limit is US$19.1 billion on certain types of “market distorting“ support. However, the latest data shows that direct support to farmers in 2019 was the highest it has been in 14 years, at around US$22 billion, leading to questions about whether the United States exceeded its annual limit on “amber box” spending.

This spike is largely attributed to recent ad-hoc compensation to farmers, unrelated to the Farm Bill and initiated by the Trump administration, to compensate farmers for unforeseen losses. To make up for lower prices and lost sales caused by the US-China trade war, the US government committed billions in dollars to farmers in 2018 and 2019 through the Market Facilitation Program. When COVID-19 hit, and the administration implemented another program – the Coronavirus Food Assistance Program – to help farmers stay afloat despite disrupted supply chains. All in all, government payments to farmers are projected to reach as high as US$37.2 billion in 2020.