{"id":300,"date":"2019-07-03T06:16:22","date_gmt":"2019-07-03T10:16:22","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=300"},"modified":"2022-04-13T22:33:08","modified_gmt":"2022-04-14T02:33:08","slug":"corn-subsidies","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/corn-subsidies\/","title":{"rendered":"Corn Subsidies: Explanation and History"},"content":{"rendered":"\n

Today most of our food comes from corn-based industrial farms. We eat a lot of corn, not just directly as corn, but also when corn is processed into ingredients for processed food<\/a> (like high fructose corn syrup) and when corn is fed to animals on feedlots.<\/p>\n\n\n\n

The popularity of corn is a result of corn subsidies. But what are corn subsidies in the United States? How did corn subsidies come about, and why do they still exist? Learn the corn subsidies history here.<\/p>\n\n\n\n\n\n\n\n

How Corn Subsidies Arrived<\/h2>\n\n\n\n

The price of a bushel of corn is about a dollar less than the cost of growing it<\/strong>. So if the supply is so abundant that the market won\u2019t pay the cost of producing it, why do farmers keep growing more of it?
<\/p>\n\n\n\n

There are multiple factors involved, but the biggest driver of production is long-standing government farm policies subsidizing the price of corn.<\/strong><\/p>\n\n\n\n

American farm policy originally was designed to limit production and support prices to help farmers. Crop surpluses during good years would drive down prices and bankrupt farmers. So New Deal farm programs established a target price for corn.<\/strong> When the market price dropped below the target price, a farmer could get a government loan, with his crop as collateral, and store his grain until prices increased again. At that point, he sold his corn and paid back the loan, or he kept the loan and gave the corn to the government. This kept corn prices from collapsing as yields continued to increase. This was the beginning of corn subsidies.<\/p>\n\n\n\n

Beginning in the fifties a campaign to undercut New Deal programs began, in an effort to let market forces push prices down. It was driven by food processors and exporters, laissez-faire economists, and businessmen upset that farmers aligned themselves with the labor movement. <\/p>\n\n\n\n

But the real dismantling was accomplished in the 1970s by Earl Butz, an agricultural economist and Richard Nixon\u2019s secretary of agriculture, who remade farm policy on the basis of cheap corn<\/strong>, to satisfy big business as well as to stem inflation of food prices.<\/p>\n\n\n\n