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The Cash Croppers: Farm Subsidies 1985-1994

The Cash Croppers: Farm Subsidies 1985-1994

The Top Two Percent of America's Farm Subsidy Recipients, 1985-1994
Saturday, September 2, 1995

Over the past 10 years, American taxpayers made payments totaling $108.9 billion through Federal farm subsidy programs. But just 2 percent of the programs' recipientsÐÐonly about 60,000 corporations, partnerships and individual farmersÐÐreceived an astronomical 26.8 percent of the subsidies, $29.2 billion in all.

The top 2 percent of America's farm subsidy recipients hauled in an average of $485,000 each over the past 10 years, more than 13 times as much as the average recipient. The top 60,000 recipients averaged more in Federal farm subsidies each year they participated ($52,169) than the typical American family earned in the average year from all sources over the past decade. And the top 2 percent of America's farm subsidy recipients could hardly have been more dependent on the farm programs: they participated on average in 9.3 out of 10 yearsÐÐnearly twice the frequency of the average farm subsidy participant.

EWG analysis of computer records of more than 112 million farm program payments, made through the U.S. Department of Agriculture between 1985 and 1994, found that hundreds of farm subsidy recipients pulled in more than $1 million each through USDA programs over the past decade. All of the top 50 individual farmer recipients of USDA subsidies received more than $1.5 million in farm, conservation, and disaster payments over the decade. Very large payments were especially common in the rice and cotton programs. The top 50 recipients of rice payments, most of which were corporations or general partnerships, all received more than $1.7 million over the 10 years. The top 50 recipients of upland cotton payments, mostly general partnerships, likewise received more than $1.8 million each over the decade. At the other end of the spectrum, the latest figures from the Census of Agriculture reveal that 70 percent of the nation's farms received no government subsidy payments.

Some top recipients received very large payments through the now defunct "dairy termination program," in which taxpayers bought entire herds of milk cows from dairy farmers during the late 1980s and early 1990's. The purchased cows were slaughtered for meat as a means of reducing milk supply and boosting milk prices. Other top recipients received very large payments through the Federal wool and mohair subsidy program, which is now being phased out over the next few years. But the vast majority of the large recipients received deficiency payments for major program cropsÐÐwheat, corn, cotton and rice. In many instances, top recipients received payments under many USDA programs, year after year.

 

Individual Recipients

Not all farmers are created equal when it comes to farm program payments. The top 2 percent of Federal farm subsidy recipients who received payments as individuals took in $20.38 billion government payments over the past decade, nearly a quarter of all payments to individuals. These big farmers averaged $413,347 apiece over the past 10 years, more than 12 times the amount paid to the average individual recipient. On an annual basis, subsidies to the top 2 percent among individual recipients came to more than $42,700 per year (versus $6,500 per year for the average recipient). The top individual recipients were also more dependent on the subsidies than the average recipient -- the top individuals received payments an average of 9.6 years out of 10, much longer than the average 5.2 years out of 10.

 

Corporations with Stockholders

Just 1,570 corporations with stockholders (the top 2 percent) hauled in more than $1.38 billion in Federal farm subsidies over the past decade, more than 14 percent of all corporate farm payments. Taxpayers provided these corporations with an average of $880,244 in Federal funds over that period-- 24 times as much as the average subsidy recipient. The biggest corporate subsidy recipients averaged more than $91,000 for each year of participation, about 12 times as much as the average subsidy recipient, and the top corporations participated much more often (9.6 years out of 10, compared to 4.9 years for the average recipient).

 

General Partnerships

This form of business organization was an especially lucrative one through which to collect farm subsidies over the past 10 years. Just 1,386 general partnershipsÐÐthe top 2 percent of that categoryÐÐhauled in more than $1.9 billion, averaging $1.4 million per partnership over the decade. These top general partnerships received an average of $173,073 per year of participationÐÐand they were in the programs an average of 8 out of 10 years.

 

Joint Ventures

Joint ventures did nearly as well as general partnerships in terms of Federal farm subsidy earnings. The top 2 percent of joint ventures--just 264 entities--pulled in a total of $313 million over 10 years, averaging nearly $1.2 million each. Their payments per year of participation topped $166,000, and they participated in 7.1 out of 10 years, a high degree of dependency on federal hand outs.

Joint ventures were especially well-rewarded in deficiency payments under the upland cotton program. Just 38 joint ventures earned $45.6 million, an average of $1,201,268 each, between 1985 and 1994. Seventeen joint ventures did nearly as well in the rice deficiency payment program, earning a total of $18 million over the decade, an average of just over one million dollars each.

 

How The States Compared

The "cash croppers" phenomenon -- big subsidy payments to a small number of recipients -- was found in every state. Payments to the top 2 percent of subsidy recipients ranged from a low of 16.8 percent of all payments in North Dakota, to a high of 51.8 percent of all payments in Arizona.

Some regions of the country showed a particularly high concentration of payments to the top 2 percent of recipients. For example, the top 2 percent of recipients in most southeastern states were paid more than one-third of all subsidies: Alabama (39.7 percent of all payments to the top 2 percent of recipients), Florida (35.3 percent), Mississippi (34.8 percent), North Carolina (40.5 percent), South Carolina (37.2 percent), Tennessee (39.7 percent), and Virginia (41.2 percent).

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