Do Cattle Ranchers and Farmers get Government Subsidies?

Is the beef for sale at the grocery store or in a restaurant subsidized by the government? In short, no, beef farmers and ranchers do not receive a check just for raising cattle, nor do they receive government compensation when cattle prices are low. Like essentially every industry in the U.S., the government is involved in some way, but with beef the government is involved much more in food safety certification after the animal is harvested.

Round steaks on a plate

Which is undoubtedly the tastiest part to be involved with. 

When looking at government subsidies, there are two kinds of that can be identified–direct and indirect. Direct payments to cattlemen only happen in a handful of certain situations. One is disaster relief. Much like FEMA grants money to people affected by a natural disaster, the USDA (United States Department of Agriculture) will do the same for ranchers or farmers.

Another way a direct payment can occur is through a NRCS (Natural Resources Conservation Service) grant. These grants are available because the government has goals it would like to accomplish, such as improved wildlife habitat. NRCS pays the farmer or rancher to accomplish a specific action on that person’s private land. This isn’t really a subsidy, but rather is a private person working on behalf of the government, modifying his or her land to match a government objective. It is important to note that most conservation practices farmers or ranchers take are done without government involvement, such as erosion control or grazing management techniques.

Wild raspberries in the pasture

Like these wild raspberries that make our ranch their home. They sure are delicious!

And that’s it for direct payments. Now certain groups with an agenda will claim ranchers grazing federal lands are subsidized because the rental rate for that land is lower than the rate it would go for privately. However, with private leases the landlord pays the upkeep costs, while with federal leases the rancher pays those costs. Not only does this make up the difference in the amount, but this arrangement saves the federal government the expense of managing these millions of acres scattered across the country.

The second part, indirect subsidies, are defined as government programs that increase profit for another entity. In beef cattle, an indirect subsidy that cattlemen benefit from is the price reporting service from the Agriculture Marketing Service of the USDA. Sale prices from around the country for cattle (and other livestock species) are collected and distributed to various outlets so ranchers and farmers know what a current fair price is for their cattle.

Another indirect subsidy are the research grants given to various entities to learn and validate new techniques that increase production profitability and/or benefit the environment. Often these go to agriculture colleges, which do the research and then distribute that information to farmers and ranchers. It is important to note that while this is a valuable indirect subsidy, virtually all facets of the American economy also receive grants, from medicine to business to engineering to the arts.

The same agenda-driven groups priorly mentioned will claim that federal crop insurance and other government payments given to grain farmers would be an indirect subsidy for cattle. Then how does this explain the same government also mandated a certain level of ethanol be used, which increased demand for grain, as well as pays grain farmers to take land out of crop production for the CRP program? The programs affecting grain production were designed, lobbied for and implemented without cattlemen in mind. While I am not saying grain programs are all bad, trying to connect federal intervention in grain production with cattle production is a non sequitur.

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If a farmer who has cattle and row crops receives a government payment for the corn, this is not connected to the cattle, as the farmer in this diversified farm wears two hats: cattlemen and crop farmer.

 

So once again, cattle farmers and ranchers do not receive subsidies for raising cattle. They may receive a payment in the event of a natural disaster or after completing the requirements of a conservation program created by the government. Indirectly, they may benefit from a research grant or a marketing service, but these types of activities are not entirely unique to beef production or agriculture.

Finally, the image created by agenda-driven groups that cattle ranchers and farmers benefit from luxurious subsidies for public land or “cheap grain” is simply a fallacy created to further the agenda of these outside groups. The farther removed someone is from the cows, the less likely their opinion of agriculture holds water.

-Jake

 

 

 

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4 responses to “Do Cattle Ranchers and Farmers get Government Subsidies?

  1. Pingback: What’s in a Farm Bill? | The Cow Docs·

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  3. How are low grazing fees not a subsidy? Excerpted from http://www.hcn.org/articles/privatize-public-lands-start-with-grazing-fees :
    In 16 Western states, public-land grazing is 80 percent cheaper than grazing on private land. Where do those grazing fees go? Half the dollars return to benefit stockmen, by funding cattle guards across roads, fencing, corrals, stock ponds and other improvements.

    Then there’s the federal agency called Wildlife Services, which slaughters native predators like bobcats, wolves, black bears and coyotes. For a century, taxpayers have footed the bill to make public lands safer for sheep and cattle. If we were serious about capitalism and free enterprise, we’d open grazing allotments to public bid just as we do oil and gas leases.

    • Equals42, thank you for your thoughts and dedication to capitalism. I would dispute the notion that the cost is 80% less than private grazing fees at this time, as private grass leases have decreased since $7 corn is no longer in the picture. They will most likely decrease again next year, due to increased cattle numbers having a bearish effect on cattle prices in 2018.

      I would also contend that auto gates, fencing and stock ponds are also improvements necessary for public land hunters (of which I am one). They allow us to get to public land, know where the boundaries are, and provide the water that supports more wildlife. It is important to remember that ranching on BLM or Forest Service means that anyone has rightful access to the land your cattle are on, which is distinctly different than a private lease. While the majority of people are respectful, the occasional jerk that leaves a gate open or cuts a fence that you cannot kick off the land is a significant economic risk that public land ranchers have to deal with.

      Finally, I am intrigued about your comments on the federal predator removal programs. While the folks there are effective, I do wonder what would happen if this opportunity was opened up to sport hunters? Depopulation programs, such as the elk in Wind Cave last year, are well-received by hunters, who foot the bill for an opportunity to do some exclusive hunting. It would probably require more federal/state coordination to make this happen, and may not replace all the federal trappers, but could be a great economic boon to certain areas.

      Thank you for your thoughts and I hope you had a Merry Christmas!

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