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Is the House farm bill a cushion for wealthy?

Monday, September 21, 2009

Minneapolis Star Tribune, Kevin Diaz

Published July 27, 2007

Do millionaire farmers need a safety net?

The question looms tall as a prairie silo over a multitude of controversies fueling congressional debate over the nation's next big farm bill. The House approved a new millionaire policy Friday as part of a multibillion dollar farm bill that funds food, commodity, and nutrition programs for the next five years.

In the past, Minnesota beneficiaries of farm payments included Minnesota Timberwolves owner Glen Taylor, a billionaire who got $542,265 in subsidies between 1996 and 2000 from farmland in Minnesota and Iowa. Nationally, the list of wealthy recipients has included media mogul Ted Turner, NBA star Scottie Pippen, former WorldCom CEO Bernie Ebbers and the late Enron chief Ken Lay.

But if the Senate goes along with the House plan in September, the maximum adjusted gross income a farmer can have and still qualify for farm payments will be reduced to an even $1 million, down from the current limit of $2.5 million, but still far higher than many reformers in both parties consider reasonable.

Minnesota Rep. Collin Peterson, the new Democratic chairman of the House Agriculture Committee, is striving to hold together a coalition of farm interests behind the reform compromise he brokered last week.

Friday's 231-191 vote reflected a party-line spat over a separate tax provision in the bill.

The bill would cut off farm payments to about 150 farm owners in Minnesota, and about 3,175 nationwide, an Agriculture Department analysis said.

Sign of broader complaints

In all, Minnesota farmers reaped about $2.13 billion in commodity program payments between 2003 and 2005. Nationally, corn is the most heavily subsidized commodity.

Curt Watson, a Renville, Minn., farmer and president of the Minnesota Corn Growers Association, said he doesn't know any farmers who make more than $1 million a year.

"Nobody talks about that in the cafes," he said. "If they do, I'm not sure we'd recognize them. There are a lot of boots and jeans going to work every day."

In real terms, the proposed payment limit doesn't amount to much. It would save about $45 million a year in a farm support system that paid out $34.8 billion between 2003 and 2005, the last year for which figures are available.

But the prospect of farm dollars for millionaires distills the objections of critics who complain that two-thirds of federal crop subsidies go to 10 percent of the nation's farmers - mainly big Midwestern corn, soybean and wheat growers.

Lori Kemp, of the Minnesota Project, a grassroots organization that promotes conservation in farming, envisions a national farm policy that benefits the larger rural economy.

"It's about agriculture, food, conservation, global warming, renewable energy," said Kemp, of Canton, Minn. "Yet the vast majority of the money goes to a small subset of commodity farmers. We need to put our money where our new priorities are for the future."

Defenders of the current system say the benefits are in proportion to the investments farmers make and the amount of food they produce.

"Obviously you get big farmers who get larger payments, but they take a larger share of the risk, too," said Mary Kay Thatcher, a farm policy specialist for the American Farm Bureau Federation, one of the nation's most influential farm lobbies.

Walz defends 'family farmers'

Martin County farmer Gerald Tumbleson, chairman of the National Corn Growers Association, says the controversy arises from a misunderstanding of the part government payments play in stabilizing farm incomes and food prices in an industry dependent on huge up-front capital investments.

"My family puts in $1 million-plus in inputs every year," he said. Spending on land, machinery, seeds and fertilizer ripples throughout the entire farm economy, he said. "It's not so much a safety net for farmers as it keeps rural America alive."

The debate has put congressional Democrats on the defensive, partly because the Bush administration has joined with critics advocating an end to payments for people who make more than $200,000 annually, who are among the wealthiest 2 percent of U.S. taxpayers.

Ken Cook, who heads the Environmental Working Group, a Washington watchdog group that advocates a more even distribution of farm payments, says the problem for Democrats is that they need to "secure congressional seats" in rural America.

One of those seats belongs to freshman Rep. Tim Walz, a Democrat who represents southern Minnesota's rich farm belt. Walz supported the House bill, voting against an overhaul offered by Rep. Ron Kind, D-Wis., that would have pared subsidies to big growers and set the maximum income limit at $250,000 to receive farm payments.

"I'm not going to defend checks going to millionaires," Walz said, "but the huge percentage of these payments ... go to people making between $50,000 and $100,000."

Walz, who ran as something of a prairie populist, said that he fears setting the income limit at a level that would "throw the baby out with the bath water."

Many farmers with adjusted gross incomes above $200,000, he said, "are still family farmers, they're still putting crops in the ground, and they're benefiting the rural economy."

 

Senate debate still ahead

While dropping the maximum net income to qualify for farm payments to $1 million, Peterson's bill would provide billions of new dollars for conservation, renewable fuels, and nutrition programs such as food stamps.

That's in addition to new benefits for growers of organic food and other fruits and vegetables that have seen little help from Washington before.

Peterson called it a "carefully crafted compromise."

But it wasn't crafted carefully enough for Republicans, who largely supported the bill's farm provisions but rebelled against a last-minute offshore tax provision designed to allow for more spending on nutrition programs.

Other reformers are still holding out for more dramatic cuts in farm subsidies when the Senate takes up the farm bill in the fall.

WHERE THE MONEY GOES

A five-year estimate of how the $286 billion in farm-aid appropriations would be distributed:

$42 billion - subsidies and other help for farmers

$25 billion - Conservation programs designed to help protect the land

$190 billion - Food stamps and other nutrition programs

$29 billion - rural development, research and energy programs

Key Issues: