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Bonus Subsidy Unfair, Wasteful

For Immediate Release: 
Wednesday, April 26, 2006

A new Environmental Working Group (EWG) analysis identifies and posts online prospective recipients of a pending $1.5 billion crop subsidy bonus that is contained in an emergency spending bill the Senate will act on this week. The analysis finds that the bonus subsidy, while well intentioned as a means of helping farmers with high energy costs in 2005, is unfair to most farmers and wasteful of scarce taxpayer funds.

The bonus subsidy will be provided only to crop farmers who already receive subsidies. Most of the nation's farmers and ranchers producing fruits, vegetables and livestock for the market will be excluded, even though they experienced the same high prices for fuel and fertilizer in 2005.

The bonus for subsidized farmers comes on top of a record $23 billion in crop subsidy checks taxpayers provided in 2005, a year in which U.S. farmers posted the second highest net farm income in history.

The EWG analysis shows that 10 percent of the bonus subsidy recipients will collect nearly 60 percent of the money.

The top one percent of bonus recipients will get an average of $21,000 each, while the vast majority—nearly 900,000 recipients—will collect an average of about $369 apiece. In fact, 54 entities, most of them very large commercial farms, will collect a bonus subsidy averaging more than $100,000, while more than 300,000 recipients will receive less than $100.

"Congress is turning a safety net into a trampoline for the subsidy-dependent," said Ken Cook, president of EWG. "If politicians want to help farmers and ranchers with higher energy costs, they ought to help all of them—not just the favored few who already collect subsidies every year," Cook said. "With millions of American families getting gouged by Big Oil at the gas pump, we wonder how taxpayers will take the news that Congress is writing an 'emergency' bonus check to help subsidized farmers with their energy costs," Cook added.

The top ten bonus subsidy recipients in the nation will be:

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EWG's analysis found that at least nine percent of the subsidy bonus—$138 million—will go to recipients who own land but do not farm it themselves, and thus did not incur the higher energy costs the bonus subsidy is meant to defray.

"We support helping farmers and ranchers hit by weather-related crop and livestock losses in 2005. We would also support reasonable energy assistance if all producers were made eligible, if they documented their need, and if reasonable limits were placed on the amount of aid," said EWG's Cook. "But it's wasting taxpayers' money to give a 30 percent increase in subsidy payments to 1.1 million crop subsidy recipients solely because they're on the USDA list of those who already collected $5.2 billion in automatic subsidy payments in 2005—and pretend it is energy assistance for agriculture."

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The Environmental Working Group is a nonprofit research organization based in Washington, DC that uses the power of information to protect human health and the environment. The Group's five years' worth of work on farm subsidies is available online at http://www.ewg.org/farm/.

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