Harvesting greenbacks in California
If President Bush’s recent proposal to cap farm subsidy payments at $250,000 had been in effect in 2003, less than 3 percent of California farmers receiving checks from Uncle Sam would have lost a dime.
Why? Because only 428 farmers in California, 32 with a Bakersfield address and one in San Francisco, received federal farm support payments larger than $250,000 in 2003. Of the state’s 19,694 farm support recipients that year, the top 20 percent got 75 percent of the money, or about $144,000 each. The rest averaged just $11,800 each.
Once a helping hand for struggling family farmers, Washington’s $17 billion a year farm program has become a gravy train for large corporate farms. Nationally, only 3,393 farmers in 2003, out of 1,836,536 farm subsidy recipients, received more than $250,000.
Big Farm Bias. The more acreage a farmer has in the heavily subsidized crops – cotton, rice, peanuts, corn, wheat and soybeans – the bigger will be the payments. Fourteen farms in California, including Dublin Farms in Corcoran, SJR Farming in Los Banos and Canal Farms in Maxwell, hit the jackpot for more than $1 million each in 2003. But Farmers Rice Coop in Sacramento was in a league of its own with almost $18 million in subsidies.
Crops generating the biggest subsidies in California were cotton, $302 million; rice, $260 million; and dairy, $54 million.
In 2003, the great majority of all U.S. farm subsidy recipients, numbering 1,470,664, got checks averaging less than $2,000 each. But payments to big farm operatives, the top five percent or 91,916 recipients, averaged $91,000 – a whopping 45 times more than the little guys. For every dollar American taxpayers gave to each small-family farmer, $45 went to the big boys. How many Americans realize that their tax dollars are going disproportionally to big corporate farmers?
To keep this tax spigot wide open, corporate farmers are counting on help from their Washington guardians and a federal watchdog that sleeps a lot.
Guardians at Work. Within hours of the White House announcing it wanted to limit federal farm payments, Sen. Thad Cochran (R-Miss.), chairman of the Senate Appropriation Committee, and 100 farm groups were reported “gearing up to fight the White House proposal.” Mr. Cochran told The New York Times, “Frankly, I don’t think anyone in the administration really thought Congress would go along with this.”
Big farmers and their allies on Capitol Hill apparently take their tax supported handouts for granted.
Sleeping Watchdog. President Bush is also proposing to do away with the so-called three entity rule, a loophole used by farmers to triple their raid on the U.S. Treasury. Under current law, a “person” eligible for subsidies includes an individual, as well as corporate, partnership and trust entities. A “person” can receive payments as an individual and as a member of two entities, or as a member of three entities.
The U.S. Department of Agriculture is the federal watchdog in Washington charged with enforcing this rule and making sure only eligible farmers get paid. But in 2004, the U.S. General Accountability Office found that the “USDA is not effectively overseeing farm program payments and does not ensure that only eligible recipients receive payments.”
GAO added that large farms form complex supplier, grower and buyer networks that are “… structured as one or more partnerships, each consisting of multiple corporations that increased farm program payments in a questionable manner.”
While President Bush’s proposal is a step in the right direction, it does not go far enough. Continued government interference in the agricultural marketplace will do more harm than good. There is simply no reason why American taxpayers should go on fattening the coffers of wealthy corporate farmers. Uncle Sam should step aside and let the marketplace sort out the winners and losers in California and elsewhere.
Ronald Fraser, Ph.D., writes on public policy issues for the DKT Liberty Project, a Washington-based civil liberties organization. Write him at: email@example.com
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“There is a cult of ignorance in this country … nurtured by the false notion that ‘my ignorance is as good as your knowledge.'” — Isaac Asimov, 1980.