June 1, 2013

SUBSIDIZING A MYTH:

The Rich and Famous at the Farm Bill Trough (Diane Katz, May 29, 2013 , Heritage Foundation)

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.

Posted by at June 1, 2013 7:33 AM
  

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