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Saturday, January 3, 2009 Subsidies for Billionaires -- and Congresspeople Too! By Monica @ 8:46 PM Well, dear readers, it’s high time I addressed the issue of farm subsidies. Hold onto your seat. First, a bit of preliminary information about subsidies. The Environmental Working Group has compiled a wonderful searchable database and some excellent statistics on the farm subsidy programs, which are a subset of the Farm Bill spending: $177.6 billion in subsidies 1995-2006 67 percent of all farmers and ranchers do not collect government subsidy payments in United States, according to USDA Among subsidy recipients, ten percent collected 74 percent of all subsidies amounting to $130.6 billion over 12 years Recipients in the top 10% averaged $36,290 in annual payments between 1995 and 2006. The bottom 80 percent of the recipients saw only $731 on average per year Now that you have an idea how the money is generally distributed, here are some more specifics about the top programs and crops that receive USDA money: Corn Subsidies $56,170,875,257 Wheat Subsidies $22,051,566,200 Cotton Subsidies $21,329,862,262 Conservation Reserve Program $20,337,282,263 (This is a euphemism for paying farmers not to farm – i.e. to pull marginal land out of production because subsidies are driving down prices which encourages overproduction.) Disaster Payments $15,114,518,393 Soybean Subsidies $14,239,702,740 Rice Subsidies $11,043,795,298 Sorghum Subsidies $4,569,912,363 Dairy Program Subsidies $3,560,356,847 Livestock Subsidies $2,908,502,988 Peanut Subsidies $2,609,286,072 Barley Subsidies $1,962,025,270 Environmental Quality Incentive Program $943,955,199 (This is a euphemism for paying farmers to clean up the factory feedlot waste that creates obnoxious odors for local residents and manure pollution sometimes hundreds of miles downstream. This program started around 1996.) Tobacco Subsidies $530,488,022 Sunflower Subsidies $461,135,751 Apple Subsidies $261,540,987 Sugar Beet Subsidies $242,064,005 Canola Subsidies $200,281,433 Oat Subsidies $198,255,252 Wool Subsidies $185,590,080 Get a load of what is missing. With the exception of apples, all fruits and vegetables are conspicuously absent. Grains are very highly subsidized. I don’t know exactly why this is, but I believe it probably stems back to Earl Butz’s desire to feed to world and mass-produce food cheaply. I need to do more research to confirm this, but it is interesting that what almost all of the subsidized items above have in common is that they store well. It’s clear with all of the above data that most farmers producing fruits and vegetables are managing to stay in business without any federal "help" whatsoever. Most people think of the farm subsidy system as helping small family farms stay afloat. Nothing could be farther from the truth: Farm subsidy payments are based on acreage, so by definition, the largest agribusinesses get the largest subsidies. Consequently, commercial farmers — who report an average income of $200,000 and net worth of nearly $2 million — now collect the majority of farm subsidies. Most farm subsidy dollars go to millionaires. … Payment limits exist — on paper. However, an entire industry of lawyers exploits loopholes, rendering these limits meaningless. Farmers can simply divide their farms into numerous separate entities and then collect subsidies for each farm. For example, The Washington Post reports that Tyler Farms in Arkansas has collected $37 million in farm subsidies since 1996 by dividing itself into 66 legally separate corporations. Other farmers evade payment limits by signing up family members, such as the Georgia farmer who reportedly collected thousands in additional subsidies by listing his two-year-old daughter as a co-farmer. It gets even sillier. Most subsidies are based on land’s historical use, even if it is no longer used for farming. So when 75 acres of Texas farmland was recently converted into a housing development, the homeowners on these $300,000-properties become eligible for annual farm subsidies for the lawn in their backyards. Residents never asked for these subsidies and have even stated that as non-farmers they do not want the government mailing them checks. It gets worse. You may be shocked to know that more than 50 billionaires received a total of more than $2 million from farm welfare programs between 2003 and 2005. The government has begun to try to curb the amount of subsidies pocketed by millionaires and billionaires. The problem is that some of the recipients are congresspeople themselves, with ten of the twelve recipients receiving up to 6 figures each in farm subsidies, pocketing a total of about $6 million over a ten year period. Do you think that the congressional recipients of this pork dole-out are likely to vote out the farm subsidy system that fattens their own paycheck? Not a chance. Get a load of this statement: "Without these programs, there are some years that we would have been in very, very dire straights," said Sen. Jon Tester, a Montana Democrat elected last year who farms 1,800 acres. Along with his wife, he received about $232,000 from 1995-2005, according to Department of Agriculture records gathered by the Environmental Working Group. Hm. I wonder if the “we” he is referring to there in "dire straits without their farm subsidies" would be he and his wife. It would also appear that there is some sneakiness involved on the part of some lawmakers in reporting this “farm” income: Members of Congress must report sources of income totaling more than $200, but most get payments through partnerships or other entities, so it can be difficult to learn which ones receive the subsidies. Recipients are searchable by name on www.ewg.org, but, for example, payments to Sen. Blanche Lincoln, D-Ark., are listed under her maiden name, Lambert, at a Virginia address near Washington. Records show Lincoln and her family members collected $715,000 from 1995-2005, the most recent year complete data are available. She said she personally received less than $10,000 a year, and the subsidies ended in 2005 when her land was sold. The proposed $283 billion, five-year Senate farm bill would preserve a system that pays 84% of subsidies to the biggest 20% of the farms, according to the working group, which supports caps on farm payments. Some agribusiness companies receive millions from taxpayers each year, even with crop prices at record levels. One farmer-senator, Republican Chuck Grassley of Iowa, plans to offer an amendment that would cap payments at $250,000 annually. Grassley collected about $225,000 for his corn and soybean farm from 1995-2005. His son took in about $654,000, records show. Neither ever got $250,000 in a year. How convenient for Grassley, keeping the annual payment cap above what he and his family would receive in a given year. How generous! But I almost forgot about the billionaires: Microsoft co-founder Allen, who got $39,932 worth of subsidies; brokerage bigwig Charles Schwab, $67,498; the Walton family, at least $8,800; and banker-philanthropist Rockefeller, who received $50,023 in subsidies. Wait…it gets better! The Pritzker family — which besides Hyatt Hotels also owns Royal Caribbean Cruise Lines and commands a collective worth of at least $22 billion — took in a total of $273,461.57 in subsidies. Among their holdings: cattle and horse ranches in California and Wisconsin, along with timber interests in Louisiana, Illinois and elsewhere. Oil heir and avid outdoorsman Lee Marshall Bass, of Fort Worth, Texas, who is estimated to command a $3 billion fortune, collected nearly $250,000. Also in the upper ranks was oil-and-gas kingpin Tom Ward, who received subsidies totaling $135,710.98 for his investments in Kansas and Texas farms and feedlots. Most of the money came via wheat subsidies. Ward's estimated wealth is $1.6 billion. According to this article, Paris Hilton’s grandfather, hotel czar William Barron Hilton, got some farm subsidy money too. That means Paris Hilton may actually inherit some of your hard earned tax dollars. Ready to end the farm subsidies yet? Rep. Marion Berry, D-Ark., says the system works well: He and his family's farming interests received almost $2.4 million in federal payments from 1995-2005, records show. His net worth in 2005 was $1.7 million to $6.6 million, according to his financial disclosure statement. "He has firsthand experience of how this really benefits farmers," said his spokeswoman, Angela Guyadeen. Wow, he sure does! Believe it or not, it actually gets even more absurd. We’re paying dead people to farm: In July of 2007, the Government Accounting Office discovered something about the farm subsidy program. It turns out, the government was still paying farmers after they had died. And it wasn’t just a small amount. It was over a billion dollars in subsidies. Over a seven year period, the Department of Agriculture paid $1,100,000,000 in subsidies to farmers who had shuffled off this mortal coil. Of the 73 estates checked by the GAO, sixteen has received over $200,000 in subsidies, and 4 topped $500,000. The Department of Agriculture also paid $400,000 to a soybean and corn farm in Illinois after the owner had died in Florida in 1995! The farm just told the government that the owner was “actively engaged” in the day to day operations of the farm. An Indiana corporation that was owned entirely by one person never notified the government of the owner’s death in 1993 and continued to collect unspecified payments for a decade before new owners filed for farm benefits. The government made $567,000 in payments to an Alabama estate over seven years on behalf of an owner who died in 1981. Another estate continued to receive unspecified payments on behalf of a person who died in 1973 — more than three decades ago — without any investigation or review. Please refer your acquaintances, friends, and family members to this post the next time they claim that agriculture would collapse without subsidies. It’s a load of hooey. In fact, 90 percent of all farm subsidies in the United States are linked to just five crops — wheat, cotton, corn, soybeans and rice. Producers of fruits, vegetables, beef and poultry receive almost no farm subsidies and most farmers simply aren't even getting farm subsidies. Somehow, their products manage to make it to market. Thankfully, we also have a 35 year case study of a country with almost completely free market farm economics. In 1984, New Zealand swiftly eliminated farm subsidies under a newly elected labor government. Only 1% of farmers lost their farms and New Zealand’s farming industry is doing better than ever, particularly the sheep industry which was previously subsidized. The advice of the Federated Farmers of New Zealand to the farmers of America? “Get off the subsidy gravy train as soon as possible.” Oh, I almost forgot to tell you. Tom Vilsack, governor of Iowa and Obama’s new pick for Secretary of Agriculture, received subsidy payments of $42,782 from 1995 to 2006. That's approximately 1/3 of the Farm Bill, folks. Your tax dollars at work, paying lawmakers and billionaires tens to hundreds of thousands of dollars, giving farm subsidies to landowners who don’t farm, paying farmers not to farm, and doling out checks to dead people. This isn’t a system that needs reform. It needs complete elimination. Especially considering that it’s been going on since 1929. Labels: Government Idiocy, Subsidies, Why the USDA is Not Your Friend E-mail Monica    PermaLink      3 Comments: At January 8, 2009 6:51 PM ,  Philosophical Mortician said... Lets have a moment of silence to remember the death of billions in private capital.....   At January 9, 2009 7:35 AM ,  Brian said... Excellent article! I remember John Stossel's report on the farm bill. You definitely found more interesting examples that he did. http://www.youtube.com/watch?v=rTI9r4pUYh4   At January 10, 2009 12:38 PM ,  Jason said... Great Article! I gave you a link on my blog Erosophia. www.Erosophia.blogspot.com ~Jason   Post a Comment << Home