Farm subsidy programs in the 21st century: America's largest welfare program for the non-needy?

By Mike Kroll

You have probably seen that commercial with the manic, weirdly dressed guy Matthew Lesko promising that if you order his book he will show you how to cash-in collecting “free money” from the federal government. I haven't ordered his book but I can tell you that the biggest pot of such money may be farm crop subsidy program payments. The Environmental Working Group just posted their updated database of farm subsidy payment distributions including nearly $47 million to 1,800 Knox County farmers during the three years 2003-2005, the most recent such data available from the USDA. Thirty of your Knox County neighbors each received $200,000 or more during that period while the Block family of Gilson, Father John and son Hans, led the list with each receiving over $383,000. Perhaps no one should be surprised that John Block is a former Secretary of Agriculture for the United States and Director of Agriculture in the State of Illinois.

Unlike what most people suspect, this money is not targeted to help small struggling farmers. On the contrary, most small farmers get comparatively little and many nothing while the richest farmers soak up the majority of crop subsidy dollars. The Bush administration is pushing to put means testing into the formula for these payments with farms earning more than $200,000 net profit deemed ineligible. Not surprisingly, the agricultural community and big agribusiness is fighting any such changes. "This data clearly exposes the hypocrisy of our commodity programs, showing how large amounts of taxpayer dollars are given out to a few, while others — here and abroad — are struggling," said Raymond Offenheiser, president of Oxfam America. A growing number of grassroots farm-oriented groups are now calling for a complete overhaul of many USDA subsidy programs.

EWG (www.ewg.org) has collected and made similar data available on their website for years but they claim this data set is the first one that fully discloses the identities of payment recipients. The new database was first posted to their website yesterday and as a result the site has been very busy. “For decades, American taxpayers have provided tens of billions of dollars in federal farm subsidies to some of the largest and wealthiest farm businesses in the nation. But thousands of people who benefited from the subsidy flow were shielded from public view behind layers of partnerships, joint ventures, limited liability corporations, cooperatives, and other business structures that obscured their personal subsidy claims.”

Illinois ranked third nationwide in farm subsidy dollars during the three year period, $3,317,776,527, surpassed only by Iowa (#1 - $3,763,757,750) and Texas (#2 - $3,430,241,409). The state's top single recipient of farm subsidy dollars was the University of Illinois ($1.180 million). The university owns 14,000 acres of land that it rents to some 40 farmers with most of this money going toward scholarships, research of extension according to university officials. The next 20 individual recipients all received over one-half million apiece.

EWG points out that the top “19 congressional districts account for half of crop subsidy program spending.” Eight of the top 100 congressional districts ranked in total farm subsidy dollars paid between 2003-2005 are in Illinois. Our own 17th Congressional district (Phil Hare) ranks 21st with $451 million. The highest ranking Illinois Congressional districts are: John Shimkus' 19th (#15, $566 million), Ray LaHood's 18th (#16, $530 million), Donald Manzullo's 16th (#34, $286 million), Jerry Weller's 11th (#35, $283 million) and Dennis Hastert's 14th ($213 million).

Amazingly, California ranks only tenth; this highlights the great concentration of farm subsidy dollars into only a few crops, most of which are grown primarily in the Midwest or eastern US. The top dollar subsidy programs are corn ($17.6 billion) and cotton ($7 billion) with conservation reserve program third (nearly $5.5 billion). The remaining top ten programs are wheat ($3.6 billion), rice ($2.2 billion), soybeans ($2.1 billion), dairy ($1.3 billion), peanuts ($1.1 billion), sorghum ($1. 8 billion) and the environmental quality initiative ($618 million). Few if any of the top 30 farm subsidy programs are applicable to California or much of the western U.S. excepting Texas

Most of these programs are self-explanatory and it should be noted that the USDA no longer funds set aside programs where farmers are paid not to grow crops. According to the USDA website the conservation reserve program is designed to assist farmers and ranchers “address soil, water, and related natural resource concerns on their lands in an environmentally beneficial and cost-effective manner” while the environmental quality initiative “provides technical and financial assistance to eligible producers to address soil, water and related natural resource concerns.”

Locally, the names of top recipients are familiar area farm families and nearly ninety percent of that money ($41.994 million) has gone into corn subsidies despite recent record production and climbing prices. The conservation reserve program provided 686 Knox County farmers a total of $5.695 million between 2003-2005 while 1,624 local farmers split $4.499 million in soybean subsidies. What is perhaps most telling is that the top thirty payment recipients, representing 1.7 percent of the group received $7,559,078 or more than 16 percent of the total Knox County subsidy dollars during those three years. Also of note, 27 of Knox County's 30 top recipients fall within the top five percent of farm subsidy recipients nationwide who together collect 47 percent of all farm subsidy dollars.

Bear in mind that Knox County was only 22nd our of 102 Illinois counties. McClean County led the way totaling $105,477,237 while nearby counties Henry (#9 - $68,182,112), Whiteside (#13 - $59,841,238 ) and Warren (#20 - $48,674,255) surpassed Knox County. Other nearby counties weren't far behind Knox County, McDonough (#26 - $44,313,028), Mercer (#28 - $42,805,583) and Fulton (#36 - $38,554,476).

When I called the Knox County Farm Bureau and University of Illinois Extension offices for comments on this data I was told no one was available to speak to me. When I called the Knox County office of the USDA I was told I could speak with Knox County executive director Victor Rhea. When we did speak however Rhea was unwilling to offer any comment and merely pointed me toward other coverage of the EWG database.

Nationwide data from EWG “...shows that farm program benefits are highly concentrated in the hands of a small minority of subsidized individuals and operations, with the top one percent of beneficiaries claiming 17 percent of the crop subsidy benefits between 2003 and 2005. Their average benefit was $377,484 per person for the three program years or over $125,000 apiece annually.” In Knox County even most of the top recipients receive less that this average benefit, only the Blocks qualify for this top one percent.

"While two-thirds of U.S. farmers receive no farm subsidy payments, American taxpayers have been writing farm subsidy checks to wealthy absentee land owners, state prison systems, universities, public corporations, and very large, well-heeled farm business operations without the government so much as asking the beneficiaries if they need our money," said Ken Cook, president of the Environmental Working Group. "Even if you live smack in the middle of a big city, type in a ZIP code and you'll find farm subsidy recipients. Surely we can come up with a smarter investment portfolio for agriculture and rural America than the list of 1.5 million subsidy beneficiaries we are publishing today," Cook said. "America's farm subsidy system is broken. It's time for change."