Federally subsidized crop insurance is the dominant farm support, but socially disadvantaged farmers are far less likely than white farmers to participate in those programs, said a free-market think tank on Tuesday. Agriculture is an overwhelmingly white occupation in the United States, and the portion of mid-size and large farms—the major beneficiaries of crop insurance — operated by whites is even larger.
“If enrollment is disproportionate across racial and ethnic demographics, this has important implications for the distributional effects of federal subsidies on the economic viability of different farms,” said an American Enterprise Institute paper written by three agricultural economists. “Uneven enrollment may be evidence of the lasting effects of historical racial discrimination in the United States, including the USDA and other public and private institutions.”
Socially disadvantaged farmers, such as Black, Hispanic, American Indian, Alaska Native, and Pacific Islander, generally have smaller farms and lower sales than do whites, who are 93.7 percent of farm operators, according to USDA data. Some 96.7 percent of mid-size and large farms have white operators.
Crop insurance is offered on more than 130 crops and categories of livestock. Some 14.7 percent of white farmers enrolled in crop insurance, compared to 6.3 percent of Black and 6.4 percent of Hispanic farmers.
The concentration of farm supports on larger farms “has been well established,” wrote Eric Belasco, Vincent Smith, and Benjamin Goren. “However, studies evaluating disparities across racial and ethnic lines are few and far between.” Over the past 30 years, the USDA has admitted discrimination against Black, Hispanic, and Native American farmers in operation of its programs.