News Coverage
Subsidies Bypass Independent Farms
Published August 11, 2008
At a time when corn and soybeans are trading at near-record prices, the U.S. government pays out millions of dollars to Lake and Porter county farm owners.
And the money doesn't flow primarily to the many small, independent farmers the bill was supposed to protect. Many of them did not see a dime of the $3 million Lake County farmers and $2 million Porter County farmers received in corn subsidies in 2005. Who did get subsidies?
One example: A group of farm owners, Moon Island Farms Partnership in Lowell, received more than $400,000 in corn subsidies that year, the most recent year for which figures are available.
"Your independent farmer struggles. Your corporate farmers do well," said Kouts-area organic farmer Andy Velasquez, whose farm doesn't qualify for subsidies.
"You have a lot of corporate farms that movie stars have a financial interest in. These are people who are primarily getting a lot of subsidies. I'm a 20-acre organic farm. We received zero dollars (in subsidies) since I've been doing this. Everything's out of my pocket."
The farm bill subsidizes corn, soybeans and other crops, but not tomatoes, broccoli, onions, peppers and berries, which is what Velasquez grows.
Because only two of five subsidy programs have an income limit, critics call the farm bill a tax-funded giveaway to wealthy individuals and corporations that don't need support. They say the farm bill funnels too much money to large, profitable farming operations with good lobbyists rather than to the small, family farmers who really need it.
Farmers counter that many of them wouldn't make it without subsidies, and that critics fail to account for skyrocketing expenses such as fuel and fertilizer, both of which are influenced by petroleum costs. Equipment and interest payments have also increased.
New five-year farm bill
When corn prices went up 65 percent over the last year and soybean prices 91 percent, that added fuel to the fiery debate.
Environmental groups and legislators including Sen. Richard Lugar, R-Ind., called for reform, saying the money could be better spent. But Congress passed a new five-year farm bill in June, agreeing to subsidize corn and soybean farmers at the same level.
"The direct payment program was largely unchanged in the 2008 farm bill, so landowners will continue to receive the $5 billion per year they've been receiving," said Michelle Perez, senior analyst with the Environmental Working Group, which has advocated stricter limits on how much money farmers can make and still receive subsidies.
"Farmers individually can get millions of dollars a year. There are about 250 or so farm corporations that have received over $1 million in a year because they take advantage of these loan programs," Perez said. "You can make $2.5 million as a couple and still receive farm subsidies."
Farming expenses costly
A Lake County farmer, who receives subsidies but didn't want to be named, said many farmers couldn't make it without subsidies.
He said critics don't take into consideration that costs of fuel, gas, electricity and labor are increasing.
"They just look at corn is $6 a bushel," the farmer said. "All they see is the high prices. They don't figure in the expenses."
Velasquez would like to see a more even distribution of subsidies, but agreed.
"A lot of people are saying farmers are getting great subsidies" and that crop prices are rising, he said. "So is gas, fertilizer, the rent of the land. It kind of balances it out. For a long time, grain farmers have taken a loss or broken even. At this time, they're getting a little bit of a break, but they're not getting rich."
The Post-Tribune left messages with numerous other local farmers, but none of them returned calls.
President Bush proposed an adjusted gross income limit of $200,000, above which farmers could not qualify for subsidies.
The Farm Bureau opposed any changes in payment limitations or means-testing provisions. The bureau said subsidies in the 2002 farm bill were $98.9 billion compared to $42.4 billion in the new bill, largely because corn prices remained high enough that farmers couldn't receive subsidies under one of the programs.
Meanwhile, actual profits are smaller due to increases in the cost to produce corn.
Lugar, a former chairman of the Senate Agriculture Committee, proposed one reform that would phase out the subsidies and substitute them with a revenue-based program so farmers could only apply for government assistance when their revenues are below a certain threshold. The proposal failed.
"There's been some progress on reform. There's certainly been more of a recognition that the program we have is not effective, but there's still been a great deal of difficulty realigning the coalition that has traditionally supported the farm bill," Lugar spokesman Andy Fisher said.
Fisher said the bill could be changed during the next five years, but that it's unlikely.
"I don't think one has been changed mid-course for a quarter century," he said. "Counting on that to happen is a long shot."
The $35 billion for agricultural commodity programs is part of legislation that also directs about $209 billion for nutrition programs, such as food stamps.
Contact Gitte Laasby at 648-2183 or glaasby@post-trib.com
