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.

img_20140730_150447_937

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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