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Sunday, July 02, 2006

Law - "Farm Program Pays $1.3 Billion to People Who Don't Farm"

The Washington Post has a major story today reporting that:

Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post. * * *

Most of the money goes to real farmers who grow crops on their land, but they are under no obligation to grow the crop being subsidized. They can switch to a different crop or raise cattle or even grow a stand of timber -- and still get the government payments. The cash comes with so few restrictions that subdivision developers who buy farmland advertise that homeowners can collect farm subsidies on their new back yards.

The payments now account for nearly half of the nation's expanding agricultural subsidy system, a complex web that has little basis in fairness or efficiency. What began in the 1930s as a limited safety net for working farmers has swollen into a far-flung infrastructure of entitlements that has cost $172 billion over the past decade. In 2005 alone, when pretax farm profits were at a near-record $72 billion, the federal government handed out more than $25 billion in aid, almost 50 percent more than the amount it pays to families receiving welfare.

The Post's nine-month investigation found farm subsidy programs that have become so all-encompassing and generous that they have taken much of the risk out of farming for the increasingly wealthy individuals who dominate it.

The farm payments have also altered the landscape and culture of the Farm Belt, pushing up land prices and favoring large, wealthy operators.

The system pays farmers a subsidy to protect against low prices even when they sell their crops at higher prices. It makes "emergency disaster payments" for crops that fail even as it provides subsidized insurance to protect against those failures.

And it pays people such as Matthews for merely owning land that was once farmed.

This lengthy report comes with a number of side-bars, including an amazing interactive map of the U.S. "This map shows each county that received the payments in the past calendar year and the program's 10 largest recipients in each county, according to payment records obtained by The Washington Post from the U.S. Agriculture Department as of February 2005."

Using the map, you can key in on any Indiana county and see the names and amounts of the 10 largest recipients. The color key indicates that no Indiana county recipients' totals were more than $20 million last year, although this looks to be the case in a number of Illinois counties. Indiana's two higest subsidy counties:

White County, Indiana, Total $10.2 million
Top recipients 2005:
SMOLEK L & G INC, IDAVILLE, IN $84,175
BRUCE W BROWN, BROOKSTON, IN $79,294
BELL FARMS INC, CHALMERS, IN $76,858
KENNETH ALTMAN, CHALMERS, IN $74,605
SCHROEDER FARMS INC, REYNOLDS, IN $72,918
STEVENSON FARMS INC, BROOKSTON, IN $72,648
I & S FURRER FARMS INC, WOLCOTT, IN $71,124
DIENER BROS INC, REYNOLDS, IN $69,241
MOREHOUSE AG INC, BROOKSTON, IN $66,763
PHERSON FARMS INC, MONTICELLO, IN $66,410

Jasper County, Indiana, Total $10.6 million
Top recipients 2005:
REMINGTON AG PARTNERSHIP, REMINGTON, IN $267,614
HARPER BROS, MEDARYVILLE, IN $248,078
TOP NOTCH FARMS, FRANCESVILLE, IN $176,870
KOHLHAGEN FARMS, RENSSELAER, IN $111,847
MOLENAAR FARMS, RENSSELAER, IN $99,438
PRAIRIELAND FARMS LLC, FRANCESVILLE, IN $94,285
GARY HAMSTRA FARMS INC, WHEATFIELD, IN $90,091
LAZY C INC, FRANCESVILLE, IN $89,068
DEKOCK FEEDLOT INC, FAIR OAKS, IN $80,343
KOEBCKE BROS, RENSSELAER, IN $79,947

How did the Post arrive at these names? This article explains:
The 1996 Freedom to Farm Act contained a provision that allowed landowners or tenant farmers to receive an annual payment even if they planted no crops. Six years later, the federal government tried to measure how much of that money, now known as direct and countercyclical payments, went to those who did not farm.

The conclusion: Its data were insufficient to allow for an estimate.

The Washington Post sought on its own to document the amount. The newspaper interviewed individual landowners and analyzed county production records, government surveys of farmers, the Census of Agriculture and a database of 217 million payment records dating to 1990.

Virtually all working farmers who receive the annual payment also receive other subsidies that are related to their farm's production, including disaster payments and price supports.

To find individuals who collect the annual payment even though they do not farm, The Post looked for those who had received that money but claimed none of the other subsidies over six years. Those who fell into this category collected $1.3 billion over the six-year period, about 3 percent of the total.

That figure excludes payments to landowners who agree not to farm as part of the government's "soil bank," now called the Conservation Reserve Program.

Note: My emphasis. The Post story is not about farmers who also collect subsidies; it is about people who collect subsidies who do not farm - people who own property that was once farmed.

Posted by Marcia Oddi on July 2, 2006 08:46 AM
Posted to General Law Related