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Chapter 3. City Slickers: "Freedom to Farm" Payments to Recipients in America's Biggest Cities

Freedom to Farm: Chapter 3. City Slickers: "Freedom to Farm" Payments to Recipients in America's Biggest Cities

February 1, 1996

In March, 1995, EWG published City Slickers, the first-ever analysis of farm subsidy payments to residents of America's largest cities. Our analysis found that American taxpayers send hundreds of millions of dollars in Federal farm subsidy checks every year to a handful of absentee owners, corporations and other "farmers" who live smack in the middle of the country's biggest cities. We also found that, from Beverly Hills to Key West, it is the rare, well-heeled suburb, urban enclave or resort spot in the United States that did not have at lease one Federal farm subsidy recipient in residence.

Under "Freedom to Farm," taxpayers will continue to make massive, guaranteed payments to urban recipients, many of whom live hundreds or thousands of miles from their farms. In fact, "Freedom to Farm" will give away millions more to these absentee owners than they would receive under current law.

City Slickers documented how easy it is under current farm program rules for a person, corporation or other legal entity to qualify for farm subsidies, even if the person or business is located in a big city. "Freedom to Farm" will make it even easier to get subsidies, which will flow to cities and sunny resort spots far removed from the farm for 7 full years.

Findings

EWG estimates that over 37,000 individuals, corporations and other entities in the nation's 50 largest cities will be eligible to receive some $365 million over the next 7 years under the proposed "Freedom to Farm" program (Table 4). The average payment will be about $10,000, but many city residents and corporations will receive hundreds of thousands of dollars over the course of the program.

Our analysis indicates that "Freedom to Farm" subsidies could exceed $20 million to eligible payees in 6 cities: Houston ($22.6 million), Dallas ($20.9 million), Phoenix ($23.9 million), Memphis ($21.9 million), Fresno ($31.3 million) and Omaha ($29.5 million). As in our original analysis, we found that in most cities, potential "Freedom to Farm" payments would pour in from farms located in dozens of states.

EWG prepared "Freedom to Farm" payment estimates for all potentially eligible recipients in these cities. In Table 5, we present the top 100 potential "Freedom to Farm" subsidy recipients, and an estimate of the payments for which they would be eligible. Few of these top recipients actually are individuals. Most of the top 100 are general partnerships, joint ventures, or corporations located in larger cities, and most of these entities will receive their payments under the rice or cotton provisions of "Freedom to Farm." All of the top 100 "city slicker," potential recipients of "Freedom to Farm" subsidies are eligible for an estimated $270,000 or more. Five big city prospective recipients could be eligible for over $1 million, and 27 may be receiving $500,000 or more. Arizona, California, Texas and Tennessee are heavily represented in the Top 100.

Out Of State -- But Not Out of Subsidies

"Freedom to Farm" will guarantee big payments to recipients who live hundreds or thousands of miles away from the farms for which payments are made. Unlike current law, "Freedom to Farm" will not even require subsidy recipients to actually participate in the farming operations for which they receive payments. Eligibility for future payments is entirely contingent on previous eligibility, so a farmer doesn't even have to continue growing crops to receive government checks. Because subsidy recipients will not have to do anything other than own land to qualify for subsidies, "Freedom to Farm" is likely to accelerate the trend towards absentee farming at taxpayer expense.

EWG estimates that at least $1.1 billion in "Freedom to Farm" payments will be made over the next 7 years to recipients who do not even live in the same state in which their farms are located.

In some areas of the country the phenomenon of taxpayer-subsidized absentee "farming" could be especially pronounced under "Freedom to Farm." In 15 states, EWG estimates that more than 10 percent of all "Freedom to Farm" subsidies will be for farms outside the state (Table 6). Out-of-state subsidies will be especially prevalent in popular retirement states such as Florida, where EWG estimates that 50 percent of all "Freedom to Farm" potential subsidy payments ($38 million) come from outside the state. In California, we estimate that $76 million in "Freedom to Farm" payments could come from out-of-state farms. An estimated $40 million in "Freedom to Farm" subsidies will come to Arizona from outside the state.

Residents of America's resort towns will also see large subsidies under "Freedom to Farm." In cities and towns along the coast of Florida, for example, more than 3,000 subsidy recipients will be eligible to receive a total of $24.4 million in freedom to farm payments over the next 7 years. A very significant share of these potential payments will be received by farms outside the state.