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

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

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.

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

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.

This makes me sick.

I get it...
 

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... :)

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

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

Well....Hmmmmm....
 

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...

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.

:bouncy:

Where do I sign up????

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

subsidies for farmers
 

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. :grump:

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

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.

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.

This should answer some questions.
 

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.

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..

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!

Pure boondoggle.
50% MORE then spent on welfare,yet we just vilify those undeserving so and so's
for taking from us.

25,000 million dollars is some serious change,and its HIDDEN in the true cost of what we pay for food.Like click food prices up by 1/3,thats what its really costing.And those of us who pay more in taxes pay more to make up for those who dont pay taxes.

Im tired of being raped in taxes,in this case to pay 'some' huge amounts of money to the very wealthy.

BooBoo

This story would be true.
And it's been going on a lot longer than the year 2000.

For the last 13 years I have been paid at least $2700 a year to leave half my place in grassland.

Another $700 to let 3 acres of woodland stand for habitat.

I have never understood why. But hey its free money and it pays my property tax's on the place. I get to farm the other half.

I can cut hay on the set aside half twice a year too. So its a great deal .

I let the government pay me to plant trees on my property. It has to remain in trees for 15 years. Was planning on planting trees anyway so there was less to mow when we are retired; plus we truly only need 5 acres. Now it is becoming a habitat for wildlife.

This program is HUGE in Missouri. I can't remember what it is called,, exactly...CSA or CSP or something like that. Anyway, if you look at real estate ads in the area a lot of them will mention the program and the number of years left on it.

Ostensibly, it is designed to allow crop lands to revert to its natural state for bird/animal habitat, etc. I suppose it is better than throwing up a subdivision (and I use the term "throwing up" purposly). But considering the state of farming in this country, I'd rather see corn or soy beans than buck brush growing in the countryside.

But you know how the government is. If we have TOO much of some crop they would rather plow it under than lower the price to consumers. I don't know - it's all politics.

donsgal

Actually it's called CRP. That's just one subsidy. I use to have a website that showed what every farmer in Iowa got for subsidies. The problem with the whole deal is that American farmers grow too much. I know it's a crock of dung that the government pays farmers not to farm. Even I get 2 grand a year from the government not to farm my land but not to worry. They get it right back in property taxes. And I get the benefit of a natural state of grasses and wildlife. Plus it's been idle for so long it can now be certified as organic if I like.

Found that website.......

http://www.ewg.org/farm/index.php?key=nosign

CRP and Crop Loss=2 different Programs
 

As stated above, CRP paid farmers (Several Years Ago) $70.00 per acre that was signed up for at least 10 years. It was called "Set Aside" and also "The 10 Year Program". It's still being used to take acres out of production, and thereby allow working farmers to earn a living, by keeping down competition.

Again, All of you who say "Away with Farm Subsidies" Just make sure you never complain with your mouth full of cheap groceries and large selections of food...If farmers competed on a completely level playing field, 3 things would happen simultaneously...
1. Many would be forced out of business...especially the smaller guys.
2. Prices would skyrocket and availability and variety would decline.
3. Factory farming (which most of you guys seem to hate, although it's another means to cheap food) would be the only farming done. It would be held in total by probably no more than 4-5 large farming consortiums.

Of course, all you "self reliant" types could survive with your roto-tiller and goats, but it might be a little tougher on the infirm or elderly or unskilled or city-dweller who cannot raise their own food.

Again, Govt. waste is NOT good, and these programs should be re-evaluated and re-vamped...but I really don't think you truly want to see the results of completely cancelling farm subsidies. People need food. A Nation needs food to be economically strong. I'm not convinced it's a bad place to spend a sliver (1.5 billion is only a sliver) of our tax dollars...Better than buying $700.00 hammers IMHO

I have to agree with Boleyz. With out the subsidies all the small farmers would be out of business. They may not get the subsidies but it does keep them in business.
If you do not like the large factory farms you will need the subsidies.

Is it truly the small farmers that benefit from government agriculture support programs? Do price supports actually keep consumer prices low? Can anyone support those ideas?

Back to Class....Ag Economics 101
 

American farmers are the best in the world. Period. No one even comes close to American Farming per acre production yields. Let's say your widowed Aunt Sue has 100 acres of tillable land, but she, herself, is unable to farm due to age and the lack of needed equipment or capital.

Uncle Sam says, sign up your land in the CRP. We'll pay you $70 per acre on your 100 acres every year for the next 10 years. You must sow it in fescue and cannot graze livestock or bale hay. No ag production whatsoever may occur on that 100 acres for the next 10 years.

Every year, Aunt Sue gets paid by Uncle Sam $7000.00 (Almost enough to cover her prescription drug needs for the year).

Why is Uncle Sam paying her? One Reason. She Owns Tillable farmland.

Now, let's take away the CRP program and see what Aunt Sue does now. She still can't farm it herself, but she sure needs more money than her fixed income provides and she's got 100 acres of nice bottomland. What will she do? She'll find a working farmer in the community who will rent her land, either for a dollar amount per acre or for 2/3 of the crop sales (she gets 1/3).

Now, statistically, Aunt Sue will probably still only make around $7000.00. Some years more, some years less, depending on crop quality and prices.

Either way, Aunt Sue is able to buy her needed medicines for the year. So what's the only variable in these 2 scenarios? Crop production.

Now there are another 10,000 bushels of corn or 3,000 bushels of soybeans or whatever, on the market for sale.

This added production creates a glut. America always overproduces and exports it's ag products, but there are only so many markets and so much demand. Since there is a glut, the price of the commodity from Aunt Sue's farm takes a nosedive.

Farmers (who often borrow to plant and repay at harvest) are suddenly forced to sell off equipment or land or go in bankruptcy. The guys operating on the slimmest margin are always the small farmer.

The following year, Aunt Sue's farmer friend is "Cutting Back", because he got creamed the year before. He has no choice. He can't keep farming at the same level of production if the prices won't support it.

Within a few years, the small-timers have given up and sold out. Market share goes to the big guys and they become fewer in number until only a few large consorciums (Factory Farms) are left operating. They're part of large corporations and get Corporate tax breaks which the small-timers can never get.

Now you've got an Oligarchy manipulating prices. Prices will definitely rise, and selection will be only that which is most profitable...

I think it's a MIGHT be a better idea to let Aunt Susie have her CRP and keep the market prices at a place where the small guy has a chance.

Class dismissed... :) :nerd:

I enjoy the justification when people are on the receiving end. Why then doesn't the gov't buy the small shoe store owner a building so he can compete with the factory farm(store) like Wal-Mart? Don't we sympathize with the plight of the small business owner being forced out?

You've said a lot to agree with - in principle at the least. :)

The problem if we pull all the subsidies - ag in the USA wouyld disappear, & the forests of Brazil would be clear-cut even faster, as less-regulated ag in 3rd world countries would take over & we would import all our food.

There are a lot of things wrong with _that_ picture too, so many people end up going back for the subsidies & the stable & controlled food supply that we have now.

It's a big cycle as you say, & the first one to step off will get run over by it..... Everyone hates the cycle - you, farmers, consumers, other countries.... But, there is no graceful way to get out of it - you would have to crush someone to do it......


I'm no big fan of the Post - their reporting lacked a lot of fact. Many of the groups they mentioned were ag coops, which are paid the big payment, but that gets divided to many small farmers that belong to the coop. Many of those farmers don't have much more land than those acres mentioned in this thread, and they are getting something from the govt - not the 'big' coop that Post lumps into their headline.

The govt as well requires a lot from farmers these days - NAIS & the like is small potatoes compared to the wetlands, HEL, fuel, fert handling, manure management plans, using food as a political weapon (tarriffs & embargos over the years) and other manipulation of world trade. Ag in the USA depends upon exports, and it is pretty hard to have a stable 'free trade' ag price when the govt does such games with our world markets.

These ag subsidies are meant, in part, to help level that unfair manipulation of the markets.

None the less, ag has it's issues, and some odd ag programs are among them.

--->Paul

Boleyz..
..you're very good at explaining things. Thanks.

I do wish the government would quit paying for not growing crops. Instead ..I wish they'd pay all these 'non-growers' to grow specific crops.

Like corn for fuel..

Or ..since there are thousands of children around the world that starve to death each day ..pay our farmers to grow foods ..that they can ship to where they don't have enough food.

$10 bread would be great even better if $9 of it was able to get into the farmers pockets.

????
 

What am I "Justifying"? I've stated repeatedly that these programs need re-evaluated and re-vamped. No one likes Govt. Waste...even people on the "receiving end". All I've done is show the reasoning behind Farm subsidies.

The Govt. does have assistance programs for small businesses. In my town there are at least 3 family shoe stores and 2 family clothing stores and 1 family hardware store AND a Wal-Mart store. The small-timers are doing Very well.

If it chaps your butt that I get a $200.00 crop -loss payment every year, that's your problem. Whether I got it or not, I can still see the original intention of farm subsidies...These subsidies were not enacted with evil intent. By the Way, I never applied for any subsidies. When the ownership of the land was transferred to me, I had to give notice to the local FSA office because we were dividing a working farm.

They notified me that my farm was under the federal program and that I would receive 1/2 the payment, since I bought 1/2 the farm.

It's kind of like the "Earned Income Tax Credit"...you ever get that? Do you gripe about that? It's when the Govt. writes a tax refund check to people who work but make so little that their taxes plus the boondoggle bonus "Tax Credit" is added on. How can you receive more on a tax refund than you paid in...hmmmmm? It's Govt. Subsidy of your family!! Whether you ask for it, want it or not, you get it...

Not hardly I am sure the vast majority of the $ goes to land rich people who are not farmers,I believe I read a readers digest thats outrageous article about it Ted turner and a bunch of rich folks get big bucks from their estates.

And Now I must Surrender...
 

Subsidies should be re-vamped, but Ted owns VAST acreage and as an American owner of tillable farmland, he is eligible. It's a sad fact that some Americans are richer than others, but Class warfare doesn't enter into the equation...

Anyway, I've tried to explain (not justify) farm subsidies, their history and the reasoning behind them....I'll be on vacation until next Monday, so I won't be reponding to critics...fire away...Ol' Boleyz can take it....Hope you all have a safe and blessed 4th of July. And take a moment to remember that despite all her faults, She's still the greatest place in the world...and if you don't agree with me on that, please, feel free to exercise your right to leave.

Thanks I will be working today except for when I go to the mandatory barbecue. Hope you have a blessed 4th of july and a great vacation, go fishing for me. I dont have a problem with Ted being Rich I have a problem with him getting richer off Mightybooboo's tax dollars. Because are grain is subsidized we are able to grow it much cheaper than places like Mexico and now are exported grain is forcing small farmers down south off their farms and to the slums.

Yep,corporate welfare.

Sorry,YOU pay YOUR own way,keep your fingers off MY wallet.

Free interprise system.You cant compete,you go under.Im not paying your way,sorry(though I am,and I dont like it,not one bit)

BooBoo

I seriously doubt Ted Turner is getting rich of MBB's tax dollars. Ted got rich via hard work ..taking risks ..having uncanny enterprenuerial vision ..and investing. He probably pays more in taxes and charity in a year than most people will make in their lifetime. He's probably created more jobs in the world than Arkansas has chickens! (..not really ..but you get the point!).

So ..as Boleyz said ..if he owns the land ..he's eligible ..same as the dirt-poor farmer ..and "Class warfare doesn't enter into the equation".