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EWG Investigation Finds Controversial 1996 Farm Law Was Subsidy Boon for Largest Farms

For Immediate Release: 
Saturday, April 1, 2000

Washington–Taxpayers may not realize it, but the billions they spend on subsidies to save family farms may be hastening their demise.

A new computer investigation by the Environmental Working Group (EWG) concludes that "the flow of farm subsidies has never been more biased in favor of large operations than it has been in recent years under the controversial "Freedom to Farm" policies introduced in 1996," said EWG Senior Analyst Clark Williams-Derry, who conducted the study. Williams-Derry analyzed records of 30 million federal farm subsidy payments obtained under the Freedom of Information Act.

The EWG investigation is the first state-by-state examination of Freedom to Farm payments during the program’s first three years, 1996 through 1998. The EWG analysis found:

  • Taxpayers provided $22.9 billion in subsidies during the first three years of the "Freedom to Farm" law, but just 10 percent of the recipients (144,000 participants) collected 61 percent of the money.
  • Nationwide, the top 10 percent of subsidy recipients averaged $32,000 in payments per year, 27 times more support than the $1,200 the typical participant received annually. Recipients in the top 1 percent of subsidy payments collected $249,000 over the three years–about $83,000 per year.
  • Some states showed an especially high concentration of payments to the largest recipients. In Mississippi, the state where the subsidy inequities were greatest, 10 percent of the participants took in 83 percent of all payments to the state–an average of $217,000 per recipient over three years. Mississippi’s top recipients took in 200 times more subsidy than the average farm in the state.

The EWG study comes at a time of severe economic distress for many family farmers. A growing number of farmers and many farm state leaders are calling for a moratorium to cool down the merger mania in agriculture that is concentrating ownership and control at every level in the food and fiber system, from farms to the companies that supply their inputs and buy their products.

Dubbed revolutionary by its proponents in 1996, the Freedom to Farm law dramatically boosted subsidy payments in 1996 and 1997, even though farm prices were robust at the time. Taxpayers were promised that payments would decline thereafter. But when prices weakened in 1998 and 1999 Congress changed its mind and approved additional billions in aid. Last October, legislators doubled payments for all farmers, regardless of how much they were receiving and whether or not they needed it.

"Surely we can do better by taxpayers and farmers than to funnel so much money to so few farmers without even bothering to find out if they need it," said Williams-Derry. "Family farmers face pressing economic and environmental problems. We should be helping them, not subsidizing the big operations waiting to buy them out."

The EWG report recommends that farm subsidy recipients be required to document their financial need before being eligible for farm subsidy payments, and that aid should be targeted to working farmers and sharply reduced for large farms. The group wants increased assistance for conservation and environmental improvements, including water treatment and sewage facilities for small towns and funding to promote organic farming and less pesticide use. EWG also recommends a substantial increase in funding for open space preservation, anti-sprawl measures, and other environmental needs in New England, Florida and California.

The Environmental Working Group is a non-profit environmental research organization with offices in Washington, D.C., Oakland, California and Seattle, Washington.

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