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

[Obser]

I wonder if this is one of the reasons we have agricultural problems.


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

By Dan Morgan, Gilbert M. Gaul and Sarah Cohen
Washington Post Staff Writers
Sunday, July 2, 2006; A01

EL CAMPO, Tex. -- 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.

"I don't agree with the government's policy," said Matthews, who wanted to give the money back but was told it would just go to other landowners. "They give all of this money to landowners who don't even farm, while real farmers can't afford to get started. It's wrong."

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.

The Post's nine-month investigation found farm subsidy programs that have become so all-encompassing and generous that they have taken much of the risk out of farming for the increasingly wealthy individuals who dominate it.

The farm payments have also altered the landscape and culture of the Farm Belt, pushing up land prices and favoring large, wealthy operators.

The system pays farmers a subsidy to protect against low prices even when they sell their crops at higher prices. It makes "emergency disaster payments" for crops that fail even as it provides subsidized insurance to protect against those failures.

And it pays people such as Matthews for merely owning land that was once farmed.

"We're simply administering it the way Congress established," said John A. Johnson, a top official at the U.S. Agriculture Department.

Today, even key farm-state figures believe the direct-payment program needs a major overhaul.

"This was an unintended consequence of the farm bill," said former representative Charles W. Stenholm, the west Texas Democrat who was once the ranking member on the House Agriculture Committee. "Instead of maintaining a rice industry in Texas, we basically contributed to its demise."


Note: Article continues at http://rawstory.com/showarticle.php?...100962_pf.html

[Red Devil TN]

Nice. Why am I none too surprised?

Since they won't loan out money to start up businesses (or give away any grants to us oppressive white male types), maybe I should ask for a couple subsidies on my land and use that to start the businesses finally.

[seedspreader]

I don't know whether to be envious or angry...

[shawnee]

That's nothing. Irrigation group my husband used to work for near Red Cloud, Ne. pays farmers not to farm as there isn't any water to irrigate with. How long can a mess like that last? Dryland for crying out loud. Plenty of that in central Ks.; all my mother's family farmed like that in Stockton and Woodston, Ks. and took their lumps for 80 years. Scraped up enough, usually, for hail insurance and prayed til harvest was in.

[jnap31]

This makes me sick.

[Boleyz]

I've got a farm in KY that has 11 acres that's tillable. It's always been a working farm, sometimes crops sometimes pasture. For the last 10 years it's been in either corn or soybeans. I've got it rented to a farmer. He tends it and I get 1/3 of the crop. I don't do anything or pay for anything.

I get a couple of small payments from the govt. called "Crop Loss Payments". These are supposed to be partial reimbursements for barley and wheat crops that I Never raise.

It's all part of the farm subsudies program. Land owners (whether they farm or not) are paid these payments as an incentive to keep their land out of production on certain crops. That way, the supply won't exceed the demand and the prices can be kept artificially high so that the farmers who do raise those crops get a decent dollar for it and are able to continue production.

The payments stay with the land...so when the guy bought his 18 acres, which must have been tillable farm land in farm country, he also gets the crop-loss payment.

This all sounds like a good idea to help keep the full-time farmers in business, by keeping small-timers and retirees "paid off" and out of business on some crops.

By accepting the payment, I agree not to raise wheat and barley. I am still free to raise corn/soybeans or anything else.

People gripe all the time about farm-subsidies and I also think it's rediculous to pay me not to raise crops I'm not going to raise anyway. But the fact is that if farmers WEREN'T subsidized in this way to regulate production, there would be years in which everyone planted wheat and wheat prices would go so low that the next year no one would plant it, since it was such a loser crop the year before.

If that happened, and there was a year when wheat production fell dramatically, you might be paying $10.00 for a loaf of bread.

The farm subsidies are not intended as a boondoggle for the farmer or landowner, although they're often portrayed that way. They're intended to regulate our national farm production and keep all of our crops in plentiful supply at decent prices for the farmer, so that we don't ever see $10.00 bread.

If you only look at the payment to this guy, or to myself, I'll agree that it should be re-vamped. However, if you look at the big picture and the economics behind it, it ain't such a bad idea.

These farm subsidies are one of the things that keep grocery prices artificially low, and selection of products high.

Americans pay less for their groceries and have a larger selection to choose from than any other place in the world. Part of the reason we never seem to run short on things like bread are these farm subsidies. Most of these programs began to develop in the 30's and 40's when there were shortages of some basic staples.

There, Ag Economics 101 class dismissed...

[knittingmomma]

I look forward to the day when bread prices are $10.00/loaf and people start realizing they can't look to the government for their every need.

Less government = more self-reliance and people taking responsibility for their own actions.

It is time for the American people to pay fair prices for food - if inflation was adjusted - I believe that milk should cost nearly $10.00/gallon today.
Then farmers would be able to live without relying on government subsidies. If people didn't want cheap stuff now - maybe employers would be able to pay their employees a fair wage. It is one big circle and one way one person can make a difference is to shop locally and support small business and small farmers.

Warm wishes,
Tonya - Simple Living Mom of 5

[Cindy in Nebraska]

Shawnee,
There is a little more to that story than what you just wrote. It is that kind of misinformation that gets farmers into trouble.
The law that affects the farmers around that area was written in the 1940's and it was ok as long as there was enough water. Now that we have been in 7 years of drought that law is turning into a real nightmare. So to compensate for crappy laws they are paying the farmers to not irrigate. Every dryland farmer I know and we are dryland farmers would love to have water.
This is the future. There will be more fighting over water.
AS for farm subsidies, there have always been people that will take advantage of the system. Welfare,etc. have the same problems.
I have always said if you want to do away with farm subsidies take them away for everyone. Railroads, airlines, etc. get a big chunk. Who pays for other unnecessities like pools, golf courses, etc.?
Someone said to me the other day, they don't want to help the farmer in drought times but they help hurricane victims, flood victims. It is all weather related. Where do we draw the line folks?
Even the oil companies get money from the gov't don't they?
Nothing will be done about any of it. It takes a payoff of $20,000.00 to get on the ag comittee. YOu have to get rid of the old boys club in Washington and I don't see that happening anytime. You need to get rid of the old boys club at the local and state levels also. I don't know what the answer is but I don't see anything changing A famous football coach from Nebraska couldn't change it. Cindy

[Boleyz]

Originally Posted by knittingmomma

I look forward to the day when bread prices are $10.00/loaf and people start realizing they can't look to the government for their every need.

Less government = more self-reliance and people taking responsibility for their own actions.

It is time for the American people to pay fair prices for food - if inflation was adjusted - I believe that milk should cost nearly $10.00/gallon today.
Then farmers would be able to live without relying on government subsidies. If people didn't want cheap stuff now - maybe employers would be able to pay their employees a fair wage. It is one big circle and one way one person can make a difference is to shop locally and support small business and small farmers.

Warm wishes,
Tonya - Simple Living Mom of 5

Most people don't want $10.00 bread. or $10.00 milk. What you advocate sounds noce, but is completely un-workable. No way employers are suddenly going to raise wages just because the farm subsidies were cut...

Indeed, how could they raise wages, since the cost of everything they had to buy would go up proportionately. On the wage most people are earning now, and would continue to earn without the farm subsidies, $10.00 bread and milk would = hunger.

Again, the only purpose to farm subsidies is to make needed crops readily available. Trust me, I've farmed and I know farmers. When a certain crop price is high, the next year everyone plants that crop. The increased supply makes the bottom fall out of the price. So the next year, no one grows it and suddenly there's a shortage.

There would be bread lines and riots in the streets if bread prices increased in one year to $10.

I don't agree with the govt. waste, and I could certainly live without mine...it's only a couple hundred a year...I'm not saying I favor all govt. programs and interferance....however, I will admit there's a point to it...Ask someone who saw the great depression and stood in soup lines. Ask someone on a fixed income...they're mighty happy they don't have $10 bread and milk.

I used to feel exactly as you do, but then I stepped back and looked at the big picture. You can advocate self-reliance all you want to but the fact is that we have at least 2 generations of Americans living right now who would either starve or steal if it came down to total self-reliance.

I don't believe the intent of Govt. was evil when the programs were started...people were hungry...however the Govt. does need to learn flexibility and phase out people who don't need it and programs that have out-lived their usefulness due to technology...

[Thoughthound]

I bought 21 acres this year and put 19 into hay and 2 into truck garden.

The government pays me for the corn "I could've grown."

But on the 19 acres of hay, not on the two of truck garden. For some reason, in Iowa, vegetables are not a real cash crop I guess.

I said to an attorney who works on land deals, "I shouldn't be getting this money. I'm not growing corn. I'm not a corn farmer."

He whispered back from across his desk. "You take the money and you put it in your pocket."

I feel guilty about it, but like others have said, it will just go to someone else, and at least I am actually farming, not building a McMansion on 40 acres of lawn.

Of course, that doesn't make it right. I don't know what to do to make it right.

On the other hand, I work 15 hours a day and get paid slightly less than minimum wage.

[HeavenHelpMe]

Less government = more self-reliance and people taking responsibility for their own actions.

[patarini]

Where do I sign up????

[silverbackMP]

Originally Posted by knittingmomma

Less government = more self-reliance and people taking responsibility for their own actions.

Could become a tree farmer and grow oaks, cherry, maple, and BIRCHES. Ahem, cough, cough.

[ninny]

I don't have a problem with farmers getting subsidies because if they don't get it our dear gov. will give it to someone overseas that hates our guts.
I would much rather have the money stay here than go to a bunch of nut cases in some other country. At least farmers are putting the money back into OUR economy. They do buy tractors, vehicles and other equipment while overseas they just build up their military so someday they can kill us.

[Jex99in00]

OK, I'm kind of jumping off topic a little bit but if I bought land I was going to farm with, could I get some of these subsidies? or does the land have to have been previously farmed? I was also wondering if there are any governmental programs that would help a 1st time buyer to get a loan or whatnot to purchase farmland? Any info is appreciated. Thanks!
Jim

[Maura]

I don't understand why these people who don't want the money get it. You have to sign up for those programs. Our property was in a govt deal, paid not to grow corn and wheat, which were the crops on it 15 years ago. I had to go to the USDA office and sign up for the deal, and have to every year. My $100 goes to property taxes. I know other people, near the shore of the Great Lakes, who get money not to grow crops anymore as part of erosion control. Few of the farmers who are eligible do not collect, as they prefer to farm, but it has served as a nice cushion for those who are unable to farm anymore.

[iocane]

Average age for farmers is 54. I think that if the price of bread is to be stable in the long term them the subsidy money needs to go for starting farmers. Of course farmers could just be helped out by making the many regulations more reasonable. I really don't like subsidies. The local corporate farmers get those, I get nothing. One got payed $30,000 to have goats get rid of his weeds. Theres probably plenty on this forum who are more deserving of that money for goats to get rid of weeds then him. Much goverment money goes to committees that can send the money out to whoever they please for whatever excuse they come up with. The huge corporate farms have their relatives and friends on the commitittees.

I do of course prefer that the money went to corrupt people in america over corrupt people overseas that will use the money to build weapons aimed at us. What would even be better is less corruption. Also the corporate farms should not have preference over family farms. Leave everything to corporate farms and eventually there will be a few that buys out or crushes all the others. Then they will come up with some excuse for food shortages and say hello to 20 dollar bread.

[Windy in Kansas]

There is a lot more to the handing out governement money than first meets the eye. There is a lot of B.S. to go through to get it. When I farmed full time I decided for a few years that it wasn't worth the hassle to let the government tell me what I could and couldn't grow and on how many acres.

A visit to this web site and some reading should help answer some questions.
http://www.fsa.usda.gov/pas/

Yes, loans can be obtained for land purchases and other, if you qualify. http://www.fsa.usda.gov/dafl/default.htm
Make sure you understand any restrictions before you sign on the dotted line.

Let me ask this---How many rich farmers do you personally know? How did they become rich?

Most farmers are of the mindset that if they have a buck they'll borrow 2 or 3 to go with it and buy something such as supplies or needed equipment and will put it into circulation again. Look at old records, most often when there are good crop years the U.S. economy is also good.

[oldmanriver]

The program I know of in KY was called set aside.. You were paid so much per acre not to grow crops on it however you could not use the land for any other reason Not for grazing animals or planting trees. You were allowed to bushhog it once per year but you could not cut hay off it.. There was some nice farms around here that were paid for with those checks..Never used it my self but then I don;t want the goverment on my land at all. Did you know that the that some of these guys where working off farm and taking vacation to Europe of the set aside checks... Money for nothing Chicks for Free bet you don;i know where those lines are from..

[nodak3]

Farm subsidies need to end. Rather than being a safety net for American consumers, they are a safety net for farmers. Now, I don't know any small business man in my town that the government bails out for bad decisions like they do the farmers. I know too many folks that "farm the government" for sure. Ugh!