Congress is considering the renewal of massive agriculture subsidies that proponents characterize as a crucial “safety net” for struggling family farms. In fact, most of the taxpayer support is actually pocketed by the well-to-do, including former President Jimmy Carter, the current Secretary of the U.S. Department of Agriculture (USDA), and the families of members currently serving on the House and Senate Agriculture Committees.
Subsidies flowing to the likes of Carter, USDA Secretary Tom Vilsack, and other relatively wealthy farm owners demonstrate just how incoherent the subsidy regime has become. New legislation in both the House and the Senate would eliminate some long-standing “direct” payments, but both bills would also establish new, potentially more costly revenue and price “protections.”
Despite record-high farm income and record-low debt, farm-state politicians and agriculture lobbyists insist that taxpayers continue to forfeit their earnings to highly successful agricultural enterprises such as Carter’s Farms, Inc., of Plains, Georgia. According to government data compiled by the Environmental Working Group (EWG), the farm owned by former President Carter and his family collected $272,288 in subsidy payments from 1995 through 2012.
During that same period, Vilsack received $82,874 in USDA benefits for his 592-acre farm in Davis County, Iowa. And USDA Under Secretary Michael T. Scuse owns 20.8 percent of a farm in New Castle County, Delaware, upon which taxpayers have lavished $1,051,107 from 1995 through 2012.
There are no farms in Manhattan, but residents there have collected subsidies totaling nearly $9 million in the past seven years. Recipients also include Mark F. Rockefeller ($356,018) and David Rockefeller ($591,057). Yes, the Rockefeller family (Standard Oil, Chase Manhattan Bank, etc.).
Over on the West Coast, in Beverly Hills 90210, the estate of comedian Jack Benny has collected $18,120 for a farm in Madera County, California, while $142,933 was paid to Mary Ann Mobley (Miss America of 1959) for a farm in Madison County, Mississippi.
These examples are not exceptions but the norm. The USDA’s Economic Research Service reports that two-thirds of the farms with income exceeding $1 million annually received government payments averaging $54,745 in 2011. Meanwhile, just 27 percent of farms with income of less than $100,000 received payments—averaging just $4,420 in 2011.
The top recipient of subsidies in the EWG data base is Riceland Foods, Inc., self-described as “the world’s largest miller and marketer of rice.” It collected $554,343,039 between 1995 and 2012. According to news reports, Riceland reported sales of $1.16 billion during 2011–2012, the fifth consecutive year of billion-plus revenues for the company.
The subsidies collected by large enterprises make it more difficult for small farms to stay in business. The flow of free dollars to big farms increases demand for farmland, which, in turn, raises the price of property. Smaller players and newcomers are priced out or left to compete in niche markets.
Members of Congress and their families routinely collect subsidies as well. For example, Lynda L. Lucas, the wife of House Agriculture Committee chairman Frank Lucas (R–OK), collected $40,613 in payments for their farm in Roger Mills County, Oklahoma. (Lucas has served on the Agriculture Committee since he was first elected in 1994. He became chairman in 2011. Lynda Lucas has received four payments between 1999 and 2003, a fifth in 2007, a sixth in 2011, and a seventh in 2012.)
Likewise, the Iowa family farm of Senator Charles Grassley (R–IA) has collected $955,192 in taxpayer subsidies from 1995 through 2012. (Grassley served on the Agriculture Committee since 1992. The Grassley farm has received payments each year from 1995 to 2012, according to the EWG.)
The payments have proved irresistible even to environmental groups that openly criticize the impact of subsidies on land use. For example, the Nature Conservancy accumulated a whopping $4,795,786 from 1995 through 2012 despite its own findings that such payments promote the conversion of natural habitat to cropland—threatening wildlife in the process. The National Audubon Society collected $932,801 from 1995 through 2012, according to the EWG.
Serious reform is obviously needed, and the time for an overhaul is ripe. The USDA forecasts that net farm income will reach $128.2 billion this year, the highest level in four decades. At the same time, farmers’ debt levels have dropped to historic lows. This means agriculture is well insulated against the risks associated with commodity production, including adverse weather and economic fluctuations.
There are a host of nongovernmental methods with which farmers can manage risk, including futures contracts and hedging, crop diversification, credit reserves, and private insurance. Given the enormous burdens already shouldered by taxpayers, there is no justification for robbing millions of middle-class Peters to subsidize Jimmy, Tom, David, and all the other hugely successful owners of farmland.