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Big Ag to Food Stamp Recipients: Go On a Diet

Monday, January 24, 2011

Last week was a reminder – if I needed it – of just how out of touch the powerful farm lobby is with the rest of America.

The Great Recession of the past two years has been devastating for many sectors of the economy. Millions of Americans remain unemployed and in need of help just to put food on the table.  Meanwhile a new Congress has taken office amid mounting demands to slash federal spending.

But not everyone is suffering. American agriculture hit a minor dip in 2009 before roaring back in 2010. Farm income nearly broke the all-time record. Federal projections indicate that it may set another new mark in 2011.

It was in this context of mushrooming ag income and fiery calls to curb government  spending that the American Farm Bureau Federation (AFBF) held its annual meeting in Atlanta (Jan 11). The AFBF is notorious for both its lobbying prowess in defense of agricultural interests and its vocal advocacy for conservative policies.

Then something unusual happened. Two Farm Bureau chapters from states that reap large amounts of federal subsidies – North Dakota and Iowa – actually took a principled stand. They argued for eliminating the perverse and wasteful federal program of direct payments to farmers, taxpayer dollars that go out year after year to the largest agricultural operations regardless of need – in bad times and in the very, very best times.

But in the end it was a quixotic and hapless quest. The Farm Bureau wrapped up its convention by adopting a status quo platform that called for the next farm bill to continue the inequitable subsidies that disproportionally benefit the biggest, most profitable agri-businesses.

One subsidy supporter went so far as to say that rather than targeting farm subsidies, Congressional budget cutters should look to another part of the farm bill – the “food stamp” program now known as the Supplemental Nutrition Assistance Program (SNAP) – as a place to attack the deficit.

“Eliminating those direct payments just doesn’t get you very far when it comes to reducing the budget deficit,” said Roger Bernard, editor of agribusiness trade paper Pro Farmer, noting that the food program has a larger share of the overall farm bill than straight payments to big growers. Instead he called for applying more stringent means tests to trim spending on food assistance.

“Congress can make sure that people who receive the benefits of these programs really need the benefits of the programs,” Bernard said.

So, we should make it harder for people at the poverty level to obtain mere pennies toward putting food on the table? While taking off the table any consideration of a meaningful income test when we give out billions of dollars to wealthy landowners and farmers, even in years of record profit? In what world would this possibly count as responsible budgeting?

Oh, right: the upside-down world of the farm subsidy lobby.

So what does it take to qualify for a little food assistance under SNAP? Or to get in line for those often profitable agricultural direct payments?

The fact is, families and individuals applying for SNAP and other federal nutrition programs are already strictly means-tested.  (You can read a primer on the program at the Center on Budget and Policy Priorities website.) To qualify, a family’s total income must be no higher than 130 percent of the poverty level ($23,800 per year for a family of three), its net income must be less than or equal to the poverty line, and its assets cannot exceed $2,000-$3,000. At this income level, families aren’t gorging on government money – or on much of anything, for that matter.

No, their focus is on what’s for dinner.

They must prove their eligibility through tax forms, background checks and an in-person interview, certify the number of people living in the household and prove their nationality and immigration status. Then, if a family qualifies, it currently receives on average about $4.46 a day for each household member. That’s less than $1.50 for each meal. Unlike farm programs, these payments are on a sliding scale, so that poorer households get more assistance while relatively better-off families get less. The maximum payment totals $2,400 a year for an individual, $8,016 for a family of four. Oh, and there are tight controls to ensure this money only gets used to buy food.

Even these modest levels of support are scheduled to drop. The economic stimulus bill of 2009 included a temporary increase in SNAP benefits, but under the school lunch law passed at the end of 2010 the additional benefits are being rescinded earlier than scheduled. This will take $2.2 billion out of the pockets of needy families.

It’s a travesty to take food off families’ tables in order to offer better nutrition for children at school, but it was a choice lawmakers felt compelled to make. We at EWG suggested taking the money out of the lavish farm subsidies, but that idea went nowhere.

And how do you get those farm subsidies? Generally speaking, the payments are tied to the amount of land a person owns or the volume of crops grown. The highest benefits flow to those who have the most land and grow the most crops – the haves, not the have-nots.

How about a means test? No way. Farm state lawmakers trumpeted that the last  farm bill, in 2008, lowered the income eligibility limits, but the new caps are laughable. Households that get most of their income from farming can earn a combined income of $1.5 million a year and still collect subsidies. And that’s after an accountant has helped back out investment income, losses and depreciation, etc.

Verification of eligibility? Don’t be silly. Unlike SNAP beneficiaries, all farmers have to do is check a box on their application forms to attest that they don’t exceed the income limits. USDA claims it is prohibited from looking at tax filings, so there is no way to know if someone is perhaps not telling the truth. The last farm bill instructed USDA to work with the IRS to come up with a verification system, but we have yet to hear of evidence that anyone has been turned away as a result.

What about a maximum annual benefit? Not a chance. There are limits on some farm subsidies, not on others. Most of the time, the sky’s the limit when it comes to cashing in on the various farm subsidy programs.

Targeted to need? Give me a break. One program stands out because it is an entitlement payment that landowners collect every year regardless of income or market fluctuations. These direct payments are set based on crop history and add up to around $5 billion a year in all.  There is a payment maximum of $40,000 a year, though married couples can get double that amount. Thus, a landowner in Manhattan or Chicago who never sets foot on a farm can collect $80,000 a year, courtesy of the American taxpayer.

Since the subsidy is tied to acreage, the biggest landowners get the biggest checks. As we’ve noted previously, farmers’ household income has been higher than the American average every year since 1996, and farms collecting subsidies of $30,000 or more have an average income of $210,000. Meanwhile, small and medium-sized farms that are struggling to make a profit and have been disproportionately hurt by the recession are getting little, if any, help. Sixty percent of farms receive no payments at all. Among those that do, the average payment for the bottom 80 percent is only around $4,000 a year.

Oh, and there are no strings attached to farm subsidy money. It doesn’t have to be used for food, put back into the farm, invested in conservation to protect water quality and wildlife habitat – or do anything other than pad the farmer’s bottom line.

So, let’s recap. A family of four at the bottom of the economic ladder can get a maximum of $8,016 a year for a limited time to buy food, and only food, and only if they make less than around $25,000 per year. Meanwhile, wealthy landowners or growers can collect virtually unlimited subsidies, often reaching well into six figures, as long as their adjusted gross income is at or below $1.5 million.

Make sense? Not to me.