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Outdated Subsidies
What do Ken Lay, Ted Turner, Sam Donaldson and David Rockefeller all have in common? Years of pocketing lots of money -- your money. Amazing as it sounds, your tax dollars have been going to rich guys like these in the form of farm subsidies. That's right, our government is paying big bucks to wealthy individuals who happen to own rural land somewhere, as long as they agree to federal rules about how -- and even whether -- they cultivate their spread.From 1995 to 2005, Lay, the now-deceased Enron CEO, got $23,326 for conservation land in Missouri; business mogul Turner raked in $590,823 for farms in Nebraska, South Dakota, Montana and Florida; Donaldson supplemented his earnings as a broadcast journalist with $88,308 for a livestock ranch in New Mexico; and Rockefeller, a financier and philanthropist, got $553,782 for two farms in New York.
Appalled that your tax money is going to people who hardly need a handout? Well, it's worse than you think. According to a study by The Washington Post, since 2000 the government has paid people around the country $1.3 billion a year not to farm. That equates to 40 million acres annually -- "the equivalent of making every farm in Wisconsin, Michigan, Indiana and Ohio idle," says Brian Riedl, a senior budget analyst at the Heritage Foundation.
And it's only a small part of the subsidy picture: In 2005 alone, 75 percent of the $20 billion in farm subsidies was paid to farmers for cultivating select crops like corn and soybeans. Among those soaking up the subsidies are well-to-do operators of large industrial farms. Meanwhile, the small, struggling farmer who may actually need assistance is getting squeezed out of business by the big boys lined up at the public trough.
Talk about an abuse of tax money. The good news is that this year, Congress is scheduled to craft a new farm bill -- a fresh chance to fix the mess. The bad news is that farm subsidies have a long history and a lot of political muscle behind them.
It all began during the Great Depression, when FDR got Congress to pass laws designed to help cash-strapped farmers. The government introduced price supports for various crops, and in periods when the crop yield outpaced market demand, the feds agreed to buy the excess supply. These and other subsidies continued to grow until, in the 1970s, the government also started paying farmers to leave some of their land fallow. Today the powerful farm lobby does all it can to hang on to these subsidies, even though most of that assistance goes to large and profitable farm businesses.
To be sure, federal money is helping keep the owners of small family farms afloat. But when over 70 percent of the subsidies go to the top 10 percent of producers, you know politics is at play. According to Riedl, farm subsidies are "economically incoherent. It's just another way to let Congress bring home the bacon." Among those legislators whose districts are living high off the hog are Rep. Jerry Moran of Kansas, Rep. Earl Pomeroy of North Dakota and Rep. Tom Osborne of Nebraska.
Those locales are no big surprise, since they're home to many agribusinesses. But take a look at the farm subsidy website of the Environmental Working Group, and you'll see some baffling zip codes, like 90210. That's Beverly Hills, which has 136 subsidized farmers listed! For my own urban neighborhood in Washington, D.C., the site identifies 62 farmers getting federal money. And 80 on the Lower East Side of Manhattan.
Let's be generous and assume these folks are genuinely operating farms somewhere. Do they really need to be on the dole?
With pork being served so freely, plenty of people wind up with money they never even expected. When Debra Hamman and her husband, Rene, bought property outside El Campo, Texas, to build their dream home, they soon discovered an annual check of about $1,000 came with it. All they had to do was not develop their 20-acre spread.
Debra, a 55-year-old retired schoolteacher, grew up in El Campo, where her grandfather was a rice farmer. She remembers the area being all farmland when she was a child, and that the government "paid people not to farm because there was such an overflow of rice." Decades later, the money keeps coming in, and at least in her family's case, Debra feels "it's not right." You see, the Hammans aren't farmers of any sort; in fact, Rene runs his own oil business. "If they're gonna give it, there's no way not to take it," Debra says. "I guess it paid for my Louisiana trip to the casino."
Others go into deals precisely because of the free cash. According to the Washington Post investigation, a real estate broker bought a swath of farmland in rural Texas that was eligible for subsidies as long as it remained undeveloped.
He carved up the acreage and resold it for housing. One man who bought 17 acres has received $13,174 in the past decade, according to U.S. Department of Agriculture records, just for keeping his backyard free of crops.
All this misuse of tax money is especially obscene at a time when we're straining to pay for Iraq and a slew of domestic needs. If we're going to rein in this spending, we might follow the lead of two U.S. Senators, Charles Grassley of Iowa and Byron Dorgan of North Dakota. In the last session of Congress, they proposed capping annual subsidies at $250,000 per farmer and closing loopholes that allow individuals to get multiple payments.
Whatever else, Congress needs to make sure subsidies are means-based, going only to those truly in need of financial help. As for all those wealthy farm operators who are lining their pockets, it's time they reaped what they sowed. And not a penny more.
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