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Despite Claims of Reform, Subsidy Band Marches On

For Immediate Release: 
Thursday, June 23, 2011

WASHINGTON – As the Senate Agriculture Committee meets today to discuss accountability and spending on farm programs, new data washes away the gloss of reform used by the subsidy lobby and its champions in Congress to pass the 2008 farm bill. The new data clearly proves that little has changed in America’s misguided and broken farm subsidy programs.

The Environmental Working Group released today the latest update of its widely referenced farm subsidy database after months of reviewing millions of new government records. The 2011 database tracks $222.8 billion in subsidies paid from 1995 to 2010. Initially published online in 2004, the EWG Farm Subsidy Database has logged 300 million searches and been widely recognized for upending outdated perceptions about who benefits from these programs.

Introduced after the Great Depression as the savior of struggling small family farms, the subsidy programs have been co-opted to support plantation-scale production of corn, soybeans, rice, cotton and wheat. The new data reaffirm that you still don’t have to be a farmer to collect federal farm subsidies despite “reforms” cited by subsidy backers that were supposed to prevent absentee land owners and investors from receiving payments intended for struggling family farmers. The so-called “actively engaged” rule adopted in the 2008 bill was designed to ensure that federal payments go only to those who are truly working the land.

Despite this rule, subsidies still line the pockets of absentee land owners and investors living in every major American city. In 2010, 7,767 residents of just five Texas cities – Lubbock, Amarillo, Austin, San Angelo and Corpus Christi – collected $61,748,945 in taxpayer-funded subsidies. Residents of Lubbock booked $24,839,154 in payments, putting it at the top of cities with 100,000+ populations that are home to farm subsidy recipients.

The phenomenon of urban residents receiving federal farm payments remains widespread and coast-to-coast. In Spokane, Wash., 1,224 residents cashed $10,580,181 in farm subsidy checks. In New York City, 290 farm subsidy recipients pulled in a total of $800,887, while 203 residents of Miami got $2,472,071. In San Francisco, 179 residents split $1,094,172, while 1,235 residents of Memphis got $4,009,874 and 1,146 people in Denver received $3,394,550. In Arizona, 1,205 residents of Phoenix, Mesa and Scottsdale divvied up $8,173,269 in payments.

See detailed maps of farm subsidy recipients in ten cities.

Go here for the full list of 2010 farm subsidy-receiving cities with populations over 100,000

“We are sending handouts to Wall Street investors and absentee landlords instead of working toward creating a safety net for working farm and ranch families,” said EWG Senior Vice-President Craig Cox. “It’s simply unjustifiable.” Cox manages EWG’s agriculture programs from the organization’s Ames, Iowa, office.

The new data reaffirm that the largest farm operations still receive the vast majority of payments. From 1995-2010, just 10 percent of subsidized farms ¬– the largest and wealthiest operations –collected 76 percent of all commodity payments, with an average total payment over 16 years of $447,873 per recipient – hardly a safety net for small farmers. Despite the “reforms” that supporters of the subsidy system claimed were incorporated into the 2008 farm bill, the top 10 percent of recipients still harvested 63 percent of commodity subsidies in 2010.

Three of the largest longtime recipients of commodity crop subsidies continued to do well in 2010. California’s SJR Farms raked in $565,798, Louisiana’s Balmoral Farming Partnership banked $929,956 and Arizona’s Gila River Farms received $781,901.

The USDA projects farm income to rise by 22 percent in the next year, following a decade that produced the five highest years ever for farm income. Household income on farms has exceeded the average household income for all Americans – and by an even greater margin, of all rural households – every year since 1996.

Subsidized agriculture’s appetite for taxpayer money is unabated, with fresh demands this year for farm disaster aid. Members of Congress of both parties from states and districts with commodity crop interests, backed by the powerful Ag lobby, continue to stave off real reform. The Congressional agriculture committees have twice rebuffed President Obama’s efforts to trim payments to wealthy farmers, and former President George W. Bush’s veto of the farm bill was overridden.

EWG’s farm subsidy database also details how federal spending on the taxpayer-funded crop insurance program rivals other farm subsidies. In 2010, taxpayers spent $4.7 billion supporting crop insurance.

See 2010 Crop Insurance payments in the United States

Crop insurance supporters will argue that the program has been subjected to cuts, but those cuts affected the profits of insurance agents and in no way impacted risk management for farmers. At a time of robust farm income and a chorus of calls to cut government spending, these are prime examples of wasteful spending.

Last week, the House Agriculture Committee took a needed first step toward reforming the deeply flawed agribusiness subsidy programs by voting to suspend payments to the Brazil Cotton Institute next year – hush money intended to keep Brazil from retaliating over the United States’ illegal domestic cotton subsidies.

For EWG, the task of bringing full transparency to farm payments remains challenging, though not impossible, due to other changes in the 2008 farm bill. Despite the Obama Administration’s promises to be more transparent, some recipients of farm subsidy payments can now cloak their identities behind corporate entities and paper farms.

Read more on EWG’s Ag Mag blog about how the Obama Administration’s USDA is less transparent than Bush’s.

As the updated Farm Subsidy Database goes public, journalists, professors, leading farm policy experts and members of Congress offered a number of testimonials to the impact it has had on US food and farm policy:

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“The EWG database has shed light on just how outdated and unfair our agriculture subsidies really are. The database has hugely impacted this long-running debate and been a critical tool in revealing how taxpayer dollars are spent.”

Congressman Ron Kind (D-Wis.)

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"I don’t know anywhere else to get information about who gets farm subsidies. EWG is performing a huge public service. The database makes it obvious that the farmers who need the subsidies the least are getting the most money, sometimes when they aren’t farming at all. This is an absurd system that needs to change, and here’s where to find the data to prove it."

Marion Nestle, food and nutrition professor at New York University

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“We need a farm safety net that is as modern and entrepreneurial as our farmers, but our current system helps too few farmers and communities at too much cost to the taxpayers. Nothing captures this contradiction as clearly at the EWG farm subsidy database.”

Scott Faber, senior vice-president, Grocery Manufacturers Association

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"With its indispensable farm subsidy database, EWG is playing a critical role in the debate over reforming agricultural policies."

Michael Pollan, author and journalist

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"This EWG farm data base has informed and advanced the debate within rural America about farm programs subsidizing mega farms to drive family size farms out of business. It is empowering rural people to become more informed advocates for federal policy that strengthens family farms and creates a future in rural America."

Chuck Hassebrook, executive director, Center for Rural Affairs

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"I can think of fewer initiatives that have had as big an impact on the American farm subsidy debate as EWG's database. By shedding light on just who gets these subsidies, how much they get, and where they reside, the EWG has exposed U.S. farm programs for what they are: expensive, outdated, distorting, regressive ways for politicians to shovel money to their powerful special interest friends. When American agriculture is finally free of the shackles of government intervention, it will in large part be thanks to the folks at the Environmental Working Group."

Sallie James – trade policy analyst, Cato Institute

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