FARM SUBSIDY ISSUES

Farm Program Pays $1.3 Billion to People Who Don't Farm

Even though Donald R. Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years. Yet under a federal agriculture program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual "direct payments," because years ago the land was used to grow rice. Matthews is not alone. Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post. Some of them collect hundreds of thousands of dollars without planting a seed. Mary Anna Hudson, 87, from the River Oaks neighborhood in Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709...The checks to Matthews and other landowners were intended 10 years ago as a first step toward eventually eliminating costly, decades-old farm subsidies. Instead, the payments have grown into an even larger subsidy that benefits millionaire landowners, foreign speculators and absentee landlords, as well as farmers. Most of the money goes to real farmers who grow crops on their land, but they are under no obligation to grow the crop being subsidized. They can switch to a different crop or raise cattle or even grow a stand of timber -- and still get the government payments. The cash comes with so few restrictions that subdivision developers who buy farmland advertise that homeowners can collect farm subsidies on their new back yards. The payments now account for nearly half of the nation's expanding agricultural subsidy system, a complex web that has little basis in fairness or efficiency. What began in the 1930s as a limited safety net for working farmers has swollen into a far-flung infrastructure of entitlements that has cost $172 billion over the past decade. In 2005 alone, when pretax farm profits were at a near-record $72 billion, the federal government handed out more than $25 billion in aid, almost 50 percent more than the amount it pays to families receiving welfare....

Cultivating Waste

HEART SURGEON Jimmy Frank Howell owns a piece of land that hasn't produced crops in years. The federal government has paid him $490,709 in rice subsidies since 1996. Michael T. Sullivan's family, corn farmers, sold most of their crop last year above a government-set minimum price. He got $292,054 in federal agricultural payments anyway. We've known for a long time that America's bloated food subsidy programs rile foreign governments, complicate trade talks, distort agricultural prices and disproportionately benefit large agribusinesses. As if that weren't enough, the results of a nine-month Post investigation published last week vividly detail the scandalous waste of America's vast farm subsidy system. Many American farmers have learned to speculate on foodstuff markets, successfully timing the sale of their crops to coincide with high prices. Yet under the misleadingly named loan deficiency payment (LDP) scheme the Michael Sullivans of the world can claim federal money as long as the market price dips below a government-set minimum price after they harvest their crop. Intended to benefit farmers hitting hard times, the LDP program handed out $3.8 billion more last year than it needed to guarantee its minimum price. Other federal agricultural subsidies go to individuals who don't even farm. Under a program Congress designed to phase out government subsidies by untying payments from the cultivation of particular crops, Mr. Howell reaps federal dollars from his land as long as he doesn't grow the crops. These "direct payments" to landowners who don't grow any crop have cost the federal government $1.3 billion since 2000. Another thick layer of irony in all of this is that these programs aren't poorly managed. They operate just as Congress passed them....

Cook vs. Combest Debates?

Environmental Working Group (EWG) President Ken Cook today challenged one the nation's most ardent and articulate defenders of status quo farm subsidy programs to a nationwide series of policy debates about the programs, former House Agriculture Committee Chairman Larry Combest (R-TX). Cook is the originator of EWG's heavily visited Farm Subsidy Database, which has been searched over 54 million times since November 2004. The Web site has drawn the ire of program defenders and bolstered reform efforts. EWG has used the database to make the case for shifting taxpayer money away from status quo programs, which primarily reward cotton and grain farmers. Cook instead favors shifting taxpayer resources to conservation programs that are open to all farmers and ranchers, regardless of size, in return for their help avoiding pollution of waterways, preserving wildlife habitat and for keeping land out of the hands of developers. Farm Journal Editor and past National Press Club President Sonja Hillgren has agreed to moderate the first debate in Washington, DC this fall. Cook suggested further debates be held across the nation before farm and ranch audiences, including Combest's home state of Texas. The debates would be moderated by distinguished agricultural journalists and policy experts. Read the letter to Combest here.