Iowa’s agricultural economy is a series of contradictions wrapped in an enigma.

The enigma is the U.S. Department of Agriculture, the massive federal agency that controls the farm economy, along with other divergent functions.

The department was created in 1862. Among other duties, the first director helped hide the extravagant spending of First Lady Mary Todd Lincoln from Congress.

The department achieved cabinet status in 1889. State-level cooperative extension services were added in 1914. Today, 29 federal agencies are under the USDA, where employment totals just under 100,000. The largest chunk – roughly 33,270 people – work for the U.S. Forest Service.

The USDA’s largest expense – 71% of its $213 billion budget – is for nutrition assistance programs, the largest of which is the Supplemental Nutrition Assistance Program – SNAP, formerly known as food stamps.

By comparison, spending for farm subsidies is relatively small, about $30 billion annually, although it has ranged from $20 billion to $50 billion in recent years.

For Iowa farmers, the subsidies can be life-changing, which brings us to the contradictions.

While farmers view themselves as independent business owners, the most successful among them are hugely dependent on federal subsidies.

“The government supports nearly all aspects of farming,” Chris Edwards, a CATO Institute economist, wrote in a briefing paper dated Aug. 31, 2023. The USDA, he said, “protects farmers from fluctuations in prices and revenues and subsidizes their insurance, land improvements, loans, marketing, research and export sales.”

“Farm subsidies are costly to taxpayers and can distort planting decisions, induce overproduction and inflate land values,” Edwards wrote, adding: “The programs discourage farmers from innovating and cutting costs, and they steer resources to households with incomes much higher than average U.S. incomes.”

Edwards’ goal was to persuade Congress to repeal, or at least shrink, the size of farm subsidies.

That hasn’t happened. At this point, I’m not sure it’s even possible, given the nearly 100-year history of farm subsidies.

U.S. farmers never had it easy, but prior to the 1920s, few seriously considered subsidizing agricultural production.

World War I changed that.

The war upset economies worldwide. After the war, prices for farm commodities fell sharply when war-torn fields in Europe were returned to production and surpluses abounded.

Meanwhile, U.S. farmers’ productivity had increased markedly as a result of new technologies and better transportation systems promoted by U.S. Secretary of Agriculture James “Tama Jim” Wilson, an Iowa Republican, who served from 1897 until 1914 under three presidents – William McKinley, Theodore Roosevelt and William Howard Taft.

During the 1920s, a complicated system of price controls was proposed by Republican Congressman Gilbert Haugen of Iowa and supported by U.S. Secretary of Agriculture Henry C. Wallace, but vetoed by Wallace’s boss, Republican President Calvin Coolidge.

Not until the Great Depression of the 1930s was Wallace’s son, U.S. Secretary of Agriculture Henry A. Wallace, and the Democratic administration of Franklin Roosevelt, able to win approval for farm subsidies.

In the years since, government supports spread, creating a bureaucratic maze of programs that includes insurance, conservation, disaster and marketing.

Beginning with the Great Depression, government regulation also expanded as people and politicians realized that economic growth worked better when it was simultaneously encouraged and regulated by the government.

That is true today, even in agriculture, where the myth of the independent producer continues.

Farmers today accept government assistance because it boosts their bottom line.

They also accept regulations that protect livestock from increasingly prevalent pandemics of swine and bird flu, as well as outbreaks of hoof and mouth and mad cow diseases.

But there remains one final point of resistance: producers who refuse to adopt government-recommended conservation practices designed to protect water systems.

As a result, excess runoff of livestock waste and other fertilizers, along with pesticides, pollute our water with nitrates and other suspected cancer-causing chemicals.

Meanwhile, Iowa politicians turn a blind eye and refuse to investigate whether farming practices play a role in Iowa’s rising cancer rates.

For Iowa voters, that is the ultimate enigma.