government agencies and
the rich get bulk of federal farm aid
John Kelly / AP 9sep01
Almost two-thirds of the $27 billion in federal farm subsidies doled out last year went to just 10 percent of America's farm owners, including multimillion-dollar corporations and government agencies, a review of Agriculture Department records by The Associated Press shows.
Rules that base subsidy payments on farm acreage, rather than financial need, mean that taxpayer money flowed to people like media mogul Ted Turner, pro basketball star Scottie Pippen and an heir to the Rockefeller fortune. They also mean some of the wealthiest members of Congress received aid from farm programs they voted for.
At least 20 Fortune 500 companies and more than 1,200 universities and government farms, including state prisons, received checks from federal programs touted by politicians as a way to prop up needy farmers. Subsidies also went to real estate developers and absentee landowners in big cities from Chicago to New York.
Sen. Tom Harkin, an Iowa Democrat and chairman of the Senate Agriculture Committee, called such examples an "embarrassment, a black eye that can only undermine public and taxpayer support for the programs."
The American Farm Bureau Federation, the nation's largest farm group, supports the rules, passed by Congress since 1996. But many individual farmers and other critics question a system that gives the country's biggest farmland owners the fattest checks.
"There have to be limits," said Mike Korth, who received about $73,000 in payments last year to help keep his Nebraska corn farm afloat. "Why are we giving millions of dollars to millionaires?"
Government aid made up almost half of total farm income nationwide last year, most of it parceled out through programs aimed at making sure farmers don't go under when the price they get for crops is not enough to pay their bills. But recipients don't have to be cash-strapped farmers, or even farmers at all. The subsidies flow to anyone with a stake in farmland and the crops that land produces.
The AP analysis of more than 22 million checks sent out by the Agriculture Department in fiscal year 2000 shows that 63 percent of the money went to the top 10 percent of recipients, including many that don't fit the image of the struggling family farmer.
That's how the heirs of billionaire John R. Simplot, a retired tycoon worth $4.7 billion by Forbes magazine's last tally, received $167,000 in aid through the family's Idaho farming empire. A trust in Simplot's name got another $92,000.
Though J.R. Simplot Co. of Boise recorded $2.7 billion in sales last year, not all the Simplot farms do well, family spokesman Fred Zerza said.
"Each of these farm operations is a separate entity that has to stand on its own, and farming has been a tough business lately," Zerza said.
In the last three years, with prices for corn, rice and other crops tumbling to near-record lows, Congress passed a series of bailouts, sending billions of dollars in extra aid to rescue farmers from mounting debt, foreclosure and bankruptcy.
The result? Farm subsidies that politicians predicted would decline under the so-called Freedom to Farm bill of 1996 instead exploded.
Of the 1.6 million farm aid recipients last year, the average recipient got about $16,000. About 57,500 recipients got more than $100,000, and at least 154 got more than $1 million. Because recipients can receive payments under several different names, it is likely there are many more who passed the million-dollar mark.
Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, argues against limits, saying big farms take bigger risks, log higher expenses and produce more of the crop.
"It's not like these guys are getting rich from government payments," Thatcher said. "They've had to have them in order to survive."
Yet among last year's recipients are people, companies and organizations that clearly did not need taxpayer handouts.
In New York's Hudson Valley, former Chase Manhattan Bank chairman David Rockefeller, grandson of famed oil tycoon John D. Rockefeller, received $146,000 in subsidies. Employees said the money goes into running the family's 3,000-acre farm, not into Rockefeller's pocket.
Agriculture Department records show checks sent to at least 20 Fortune 500 companies, including IBP, Chevron ($100,770), Archer Daniels Midland ($17,793) and Caterpillar ($59,184).
"The price support program is to encourage production of the crops, and we are just as much a part of that program as anyone else," said spokesman Ed Spaulding of Chevron, which hires tenants to farm some of the oil-bearing land it owns in central California and then collects crop payments to maximize its return on the property.
U.S. Rep. Doug Ose, R-Calif., a developer ranked 22nd on Roll Call magazine's list of the richest members of Congress with a net worth of $12.5 million, owns part of two companies that got about $149,000 in rice subsidies.
Ose, who sits on the House Agriculture Committee, gave up his decision-making roles in the two companies when he took office, spokesman Yier Shi said.
Scottie Pippen, whose Portland Trailblazers contract pays him about $14 million a year, received $26,000 for growing hardwood trees on an environmentally sensitive plot in his native Arkansas. When Pippen bought the land in 1993, it already was enrolled in the conservation program, according to USDA records.
And Ted Turner, one of the largest private landowners in the United States, and Turner's companies collected at least $190,000 in subsidies last year for ranches he owns in Montana, South Dakota and Florida.
Russ Miller, manager of Turner's farm and ranch companies, based in Bozeman, Mont., said more than half the subsidies his boss got were for conservation programs and added that Turner has spent millions of his own money on such projects. "We feel there is a public good from what we are doing on our farmland," Miller said.
At least $17 million in crop subsidies went to government agencies of all stripes -- airports, wildlife departments and prisons. Colleges and universities got another $6.3 million on research crops or farmland bequeathed by benefactors.
Montana received $5.4 million for land set aside for the state in its constitution to help pay for public schools. Montana's Department of Natural Resources partners with tenant farmers, then shares in the subsidies paid for the crop. Louisiana was among at least 14 states to get subsidies on crops grown by convicts on prison farms.
The House Agriculture Committee already has endorsed a package that funnels more money into the existing system and adds some new subsidies, but critics say it does not curb payments to mega-farms or the rich.
Agriculture Secretary Ann Veneman has said only that the Bush Administration will offer Congress guidelines for "ensuring a strong income safety net, pursuing a more market-oriented U.S. farm policy and opening up new trade opportunities abroad."