New Light Shed on Farm Subsidy Payments

By SAM HANANEL and MARY CLARE JALONICK
Forbes Magazine

06.11.07

From Texas billionaires to Washington lobbyists, it's no secret that wealthy people can get federal farm subsidies.

But now, for the first time, new Agriculture Department data makes it easier to see exactly who benefits from the nation's generous farm subsidy program.

Instead of having to sift through a complex web of corporations, partnerships and other business entities, the USDA has assigned a specific dollar amount to the individuals behind the businesses.

Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, said the new data could affect farm bill negotiations this year as lawmakers consider reducing direct payments to farmers.

"It's going to be harder than ever before to defend the status quo," he said. "I think the defenders of big payments, their position is going to be severely weakened."

The Environmental Working Group, a public interest group that has long pushed for more equitable distribution of farm subsidies, has compiled the data and posted it online for users.

EWG president Ken Cook said he hopes the new information will help spur reforms as Congress and the Bush administration consider what a new multibillion-dollar farm bill should look like.

"It really does raise the question why shouldn't we at least impose some sort of reasonable test of means before we disperse all this money," Cook said.

The database includes about 358,000 beneficiaries who received $9.8 billion in crop subsidy benefits between 2003 and 2005.

That includes Texas oil billionaire Lee M. Bass, who qualified to receive $242,787 in subsidies from 2003-2005. Former NBA star Scottie Pippen received $78,945 over the same period in conservation subsidies for land he controls in Arkansas. And Washington uber-lobbyist Gerald Cassidy got $10,540 for maintaining a portion of his Dorchester County, Md., farm as wetlands.

The current farm bill, which expires Sept. 30, limits farmers to $360,000 in subsidies per year, but that ceiling is filled with loopholes that allow many farms to exceed it.

The Bush administration has proposed closing the loopholes and halting subsidies to anyone making more than $200,000 in adjusted gross income. Last month, Sens. Byron Dorgan, D-N.D., and Charles Grassley, R-Iowa, introduced legislation that would cap individual farm payments at $250,000.

Those changes would target people like Maurice Wilder, a Clearwater, Fla., developer listed on the new EWG database as the nation's top beneficiary of farm payments in 2005, the most recent year for which information is available.

Wilder received nearly $1.8 million in farm subsidy benefits that year, according to the database. He owns a corporation worth $400 million and controls about 180,000 acres of farm and ranch land in more than a half dozen states.

"I don't think they should change farm subsidies for sure," Wilder said. "Suppose a farmer was doing $500,000 in business and if he lost $200,000, then he wouldn't be entitled to any government money. I think that's wrong."

The new data released by USDA was compiled at the request of Congress and obtained by EWG and several media organizations under the Freedom of Information Act.

According to EWG's analysis of the new data, just 10 percent of farmers received 66 percent of federal farm payments from 2002-2005. But those figures don't trouble everyone.

"That's probably in the same proportion as the food they produce," said House Agriculture Committee Chairman Collin Peterson, D-Minn. "That's the way it's designed to work. I have more concern about landowners who are not farmers getting payments."

It's not just wealthy individuals who get farm subsidies - state governments are reaping the benefits too. In Arkansas, for example, EWG ranks the state's Department of Correction as the top subsidy beneficiary, pulling in nearly $2.3 million from 2003-2005. The University of Illinois is first in Illinois, with nearly $1.3 million in payments for the three-year period.

But James Bost, farm administrator for the Arkansas Department of Correction, defended the subsidies.

"What we do benefits every farmer in the state of Arkansas as well as every other taxpayer," Bost said.

Former Texas Rep. Charlie Stenholm, a longtime supporter of farm programs, was the top Democrat on the House Agriculture Committee before he left Congress in 2005. He now works as a Washington lobbyist and was the city's top beneficiary of farm subsidies from 2003 through 2005.

Stenholm, who received payments totaling $168,626 for farming wheat and cotton with his son on his Texas farm, says EWG has in the past organized its data in a misleading way to prove a point.

"Most American people do not support farm subsidies," Stenholm said. "Anything you can do to make them look as bad as they possibly can works to your advantage."

Still, he said, he believes Congress is moving toward a reduction in direct payments, which are not based on current crop production or prices. Harkin supports this approach, and many members believe it would free up money for other programs.

Associated Press Writer Frederic J. Frommer contributed to this report.

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