Commodities and Subsidies, Explained

You’ve probably heard of commodities and the subsidies the government pays the people (or businesses) who grow them. But what are commodities, anyway? Who gets subsidies, how do they work, and why?

The issue of subsidies is one of the most contentious in the whole Food & Farm Bill debate; we’ve collected some materials here to help you make sense of it.

What Are Commodities?

Commodity crops include wheat, feed grains (grain used as fodder, such as maize or corn, sorghum, barley, and oats), cotton, milk, rice, peanuts, sugar, tobacco, and oilseeds such as soybeans. Most fruits and vegetables are not classified as commodity crops, and are instead known as “specialty crops.”

Commodity crops (and the subsidies paid for them) are addressed in Title III of the 2008 Food and Farm Bill, which accounted for about 11% of the bill’s total spending.

How Subsidies Work (and Don’t)

  • Farm Subsidy Primer
    Environmental Working Group
    A great, simple, readable overview. EWG is perhaps the leader in the field for in-depth research and compelling, accessible presentation of subsidies – and all their outrageous flaws. Also check out the 2011 Farm Subsidy Database.
  • The Non-Wonk Guide to Understanding Federal Commodity Payments
    Scott Marlow of the Rural Advancement Foundation International 
  • Billions In Farm Subsidies Underwrite Junk Food, Study Finds (9/22/11)
    Huffington Post
    “…$17 billion of the total $260 billion the government spent subsidizing agriculture went to just four common food addititives: corn syrup, high fructose corn syrup, corn starch and soy oils.”
  • High Crop Prices a Threat to Nature? (11/28/11)
    Star Tribune (MN)
    In the next few years, millions of acres of prairie and wetland habitat may be plowed under as farmers choose between leaving it to nature or converting it to cash crops. With corn prices at an all-time high, “many predict that nature will be the loser.”

The Subsidy Debate: What to Do About Them

How the Debt Deal and Budget May Affect Subsidies

  • Farm lobby’s power withers as subsidies face cuts (9/20/11)
    David Rogers, Politico
    “Washington’s debt crisis brings American agriculture to a crossroads this fall and no other sector of the economy may have more to gain or lose from the debate in Congress over deficit reduction.”