Archive for Sunday, December 9, 2001

Farm subsidy program provides fertile ground for controversy

December 9, 2001


What do media magnate Ted Turner, the Kansas University Endowment Association and some of the largest corporations in the nation have in common?

Aside from having assets worth billions of dollars, they also receive taxpayer funds through federal farm subsidies.

A recent study of who gets federal crop payments has prompted a lot of questions about the billions of dollars spent annually on subsidies.

And the questions are getting louder as Congress debates a bill that would renew and expand farm subsidies that cost about $170 billion during the next 10 years. The U.S. Senate is expected to vote this week on the new farm bill.

Fueling the debate is a database of 2.5 million farmers and landowners who received farm subsidies from 1996 through 2000, available online for the first time through a Web site operated by the Environmental Working Group, an advocacy organization that compiled the numbers from government records.

The database "opened up the farm bill debate to a lot more media attention than there would have been otherwise," said Ken Cook, the group's president. "That provided us the opportunity in that debate to make our case."

The Washington, D.C.-based group says the current system is a gigantic misuse of tax dollars, turning on its head a program that was supposed to help farmers stay on the land.

"The taxpayers are paying giant corporations to buy out small farms. The system is just a disaster," said Sarah Feinberg, group spokeswoman.

She says her organization wants subsidies geared more to small and medium-sized farms, and to farmers' efforts to take care of the environment.

Kansas deeply affected

The future of farm subsidies is crucial in Kansas the state ranked fifth in the number of farms receiving federal crop subsidies. Kansas farms received $4.6 billion from1996 through 2000 in subsidies from the U.S. Department of Agriculture, according to the organization's analysis of USDA data.

For their part, farmers say they need the subsidies partly because the government, through trade policies, has prevented U.S. farmers from entering certain markets, and in other areas has kept prices for crops artificially low.

"I don't like to cry about our situation, but it's a sad fact of life," said Roger Pine of Pine Family Farms in Lawrence.

The federal government provides subsidies for eight commodities, including Kansas staples wheat, corn, sorghum and soybeans.

In 1999, federal subsidies made up 36 percent of all farming cash receipts for covered commodities, the government reported.

But most of that money went to a select few.

From 1996 through 2000, according to the analysis, 10 percent of subsidy recipients received two-thirds of all commodity crop money. Kansas figures reflected the same trend with the top 10 percent getting 61 percent of the money. The average payment to the high-end recipients in Kansas was $196,000, while the bottom 90 percent of recipients received average payments of about $14,700.

And the organization's analysis found numerous instances of payments going to extremely wealthy people, Fortune 500 businesses and city dwellers who don't even farm their land.

KU case in point

In Kansas, for example, the KU Endowment Association has assets worth more than $1 billion. Yet it received $817,000 in farm subsidies between 1996 and 2000, putting it 83rd on the state list.

Those payments are divided with operators who manage the 45,252 acres owned by the endowment, according to John Scarffe, director of communications.

The endowment's farmland is spread across 47 counties in Kansas and Oklahoma. About 25,000 of the acres came from a bequest from Elizabeth Watkins.

"We're just like anybody else owning and operating farmland, trying to make it in these difficult economic times," Scarffe said.

The endowment's subsidy checks are sent to a custodian bank in Hutchinson, which helps manage the endowment's farm holdings.

Feinberg, with the Environmental Working Group, asked, "Is that really who the taxpayers are supposed to subsidize?"

Malcolm Moore, an area farmer, said the farm subsidies to corporate farms rankle him the most.

"The USDA (federal Department of Agriculture) is simply a front for these huge companies," he said.

Environmental concerns

Environmentalists say the payouts perpetuate a system that is unfair to small farmers by inflating land costs and depressing prices. The system is harmful to the environment by encouraging farming practices geared toward getting subsidies, such as depleting groundwater resources to grow corn, while robbing potential funding programs aimed at conservation.

"It promotes a system that is abusive to soil and water and it is going to cost taxpayers more in the long run," said Mary Fund of the Kansas Rural Center, a nonprofit group that advocates for family farmers and environmental programs.

But others in agriculture have a different view.

They say they take the subsidies because the federal government has set into motion policies that produce low crop prices and block U.S. entry to certain markets, such as Cuba.

"I'd rather be paid a price that reflects the investment made" than receive a subsidy, said Pine, whose Pine Family Farms received $412,054 from1998 through 2000 and $96,875 from 1996 through 1997, according to the organization's report. The family grows corn and soybeans and has a turf grass business.

Those payments, Pine said, may seem like a lot of money, but it covers three families during a five-year period, and all of it went to paying bills. "It's passing through. It's not like there's a windfall profit," he said.

'Work the system'

For many Kansas farmers, the payments equal survival. Without farm subsidies, the average Kansas farmer during the past two years would have had no net income from farming, according to government statistics.

And farmers say they don't want to see the system abused, but that people are going to take advantage of the system.

The list of subsidy recipients "makes for good coffee-shop talk," said Bill Wood, Douglas County agriculture extension agent. But, he added, "It's just like any system. People work the system."

Johnathon Alley, county executive director of the federal Farm Service Agency, which handles the subsidies, said the payments help keep food prices low.

"The farmer is not being subsidized; it's the consumer. The government's goal is to provide a plentiful, safe and affordable food supply," Alley said. He also said the Environmental Working Group's information was misleading because many of the subsidies are in the form of loans that are eventually repaid.

But Feinberg stood by her group's work, saying she believed publicizing the subsidy information would help change the public's opinion about farm policy, especially among farmers.

She said a farmer can look at the information on the group's Web site at and realize "no wonder the agribusiness down the street is buying me out."

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