News Coverage
Payment Storm Looms
Published June 10, 2007
Florida-based businessmen Maurice Wilder collected more than $3 million in farm program payments from 2003 to 2005, making him the nation's largest recipient of farm subsidies during that time. But Wilder, whose assets are estimated at over $500 million, isn't making any apologies: Without the payments, he said, it'd be very hard to run a profitable operation.
OMAHA (DTN) -- If the Environmental Working Group had a poster boy against farm subsidies, Maurice Wilder would fit the bill.
That may be unfair to Wilder, one of the largest farmers in the country with about 40,000 acres of Midwest corn planted this year alone. But the Clearwater, Fla., resident is also the nation's largest recipient of farm subsidies from 2003 to 2005, collecting more than $3 million during those years.
That's a large chunk of taxpayer support for a single farmer, to be sure. But it gets more complex because crop farms are just part of Wilder's business interests. Along with his cropland, Wilder also owns cattle, bison and elk ranches.
And then there are his RV parks in Texas and Florida, as well as mobile-home parks in Florida, Illinois, South Dakota and Texas.
Lastly, Wilder also owns at least eight commercial office buildings in and around Tampa.
All told, a 2005 profile on Wilder estimated his assets at about $500 million, a dollar figure Wilder does not dispute.
Along with his real-estate and farm income, Wilder also collected just over $3 million in commodity payments from the federal government from 2003 to 2005, according to USDA farm-payment data compiled by the Environmental Working Group. Most of that income was not directly linked to Wilder until the USDA released new data tying farm subsidies to a person's ownership in a farm business.
In 2005 alone, Wilder received $1,754,916 in commodity-program payments, which was $728,172 more than anyone else received that year. Wilder points out he has a passion for farming and visits his farms often, but agriculture doesn't sustain his lifestyle or career.
"I'm in quite a few different businesses so we don't have to depend on farming altogether," Wilder said. "We have around almost 200,000 acres altogether so we are in the agriculture and the ranching business quite a bit."
The law for commodity payments actually caps them at $360,000 per person, allowing a farmer to use three separate business entities to achieve those amounts. The payments are capped at $40,000 for direct payments, $65,000 in counter-cyclical payments and $75,000 in loan-deficiency payments for the first entity or person, then caps are cut in half for two more entities to, in theory, reach $360,000. The fallacy is that Congress didn't exactly create interlocking firewalls to cap payments. Instead, Congress has always allowed a backdoor for farmers who use commodity certificates in the marketing loan program instead of loan deficiency payments.
Meant to minimize marketing-loan forfeitures, commodity certificates are used by large farmers as paperless transactions that allow the farmer to place the crop under loan with the Farm Service Agency after harvest. The farmer then redeems the certificate to pay off the loan and collect the difference between the posted county price and the loan rate while avoiding the LDP limit. These are only really effective when there is a wide spread between the market price and the loan rate.
The vast majority of Wilder's payments came through commodity certificates to avoid the $150,000 cap on LDPs. Often considered a tool for just cotton and rice farmers, large corn producers have used commodity certificates as well.
Wilder began using commodity certificates in 2004. That year, he collected $1,143,474 using certificates, which increased to $1,710,645 in 2005.
"I think the farmer is definitely entitled to it," Wilder said. "He works hard and he is definitely entitled to it."
A rare voice, Wilder makes it clear he is an advocate for larger farms. Small farmers can't meet the capital needs it takes to compete in today's world, he said. At the same time, large farmers such as himself don't receive the full benefits of federal farm programs, he said.
"Really, a big farmer doesn't get the benefit a small farmer gets," Wilder said. "We're limited to a certain amount and here we've got over 40,000 acres of corn planted this year."
As for the age-old argument that large operators force out small, family farmers, Wilder acknowledges large farmers continue buying land, but higher land values are the benefit small farmers receive when others expand their land holdings.
"That helps the farmer out a lot and they don't realize what the big farmer is doing for the small farmer out there," the 64-year-old Wilder said in an interview with DTN. "I think it's a very big thing for them if they sell the farm or pass it on to their children."
People who question the overall value of farm subsidies say Wilder may be the type of person farm programs should support. After all, Wilder has made a substantial investment in the success of agriculture.
"So if you want to support the corn industry, he's exactly the kind of person you want to support," said Daniel Sumner, an agriculture professor at University of California-Davis. "You don't have a rationale for taking him out of the program other than he is rich as heck and that makes us all mad at him."
Wilder has that same approach. Farm-program payments ensure America's cheap food supply. Policies such as payment limits or means tests only work against large operators, he said.
"The amount of acres that you have, if you are losing money per acre, you are going to lose more, so I think the payments are very good," Wilder said. "To keep the farming going, they have to have a program of some kind if the prices are low."
Wilder apparently also avoids the current means test for farmers that prevents people earning more than $2.5 million in adjusted gross income from collecting payments, unless 75 percent or more of their income comes from farming. A supporter of President Bush, Wilder said he was surprised to learn the administration had proposed eliminating commodity payments for people with an adjusted gross income of more than $200,000. The proposal hasn't exactly been welcomed with open arms by major commodity organizations, either.
"I just can't believe he would eliminate people for trying to make more," Wilder said. "He sure as the world doesn't try to eliminate them in the oil business for trying to make more."
Wilder definitely doesn't think policymakers should try to stymie large landowners because of the trend in agriculture toward larger operations. With people moving off farms, that's only going to translate into more farmers pushing the payment limit, he said.
"It's really going to be all really bigger farmers and I don't think they should jeopardize them with the farm payments," he said. "Without the payments, it's been very hard to be a profitable organization."
Some lawmakers, notably Sens. Charles Grassley, R-Iowa, and Byron Dorgan, D-N.D., have proposed capping farm payments at $250,000 and closing the "loophole" that allows unlimited gains from commodity certificates. The USDA proposal to tie payments directly to a person and keep the current cap at $360,000 also would deal with marketing-loan gains from certificates.
Farm groups are divided on payment limits. Ferd Hoefner, executive director of the Sustainable Agricultural Coalition, said he thinks there should be tighter limits on the term "actively engaged" in farming to show more actual labor or management. Large operators shouldn't get payments simply because they own land and visit their farms every once in awhile.
"Our philosophy is it is supposed to be a safety net and it should provide a safety net for a moderately-sized operation," Hoefner said. "Anything bigger than that you can farm if you want, but it's with your nickel."
The American Farm Bureau Federation, which represents a broad array of farmers nationally, opposes tightening the payment limits, saying the 2002 farm bill established a good working payment limit at $2.5 million with an exemption if the farmer draws at least 75 percent of his or her income from agriculture.
"Farm-program payments are based on production," said Dana Brooks, a former lobbyist for the American Farm Bureau who just recently became government affairs director for the Florida Farm Bureau. "And as long as payments are based on production, those who produce the most receive the most, but they also have large risks."
Wilder noted that the high price of corn now would limit or practically eliminate large program payments in 2007. With the price of corn, it's much easier to make money and there will likely be no commodity payments. Still, he hopes people understand the need for commodity programs.
"I'm very proud that the government has paid," he said.
Chris Clayton can be reached at Chris.Clayton@dtn.com.
