How farm subsidy checks end up in big cities
City Slickers: Chapter 1. About City Slickers
The City Slickers reports are the first in a series of Environmental Working Group studies on Federal agriculture subsidy programs. The national summary study and the 50 city-specific reports focus on the phenomenon of payments made to recipients whose permanent mailing address on file with the U.S. Department of Agriculture (USDA), as of the Fall of 1994, is in one of the nation's 50 biggest urban centers. Future studies will examine payments made to other cities and to states, congressional districts, and small towns; the structure of farm entities receiving payments and the amounts received, with special emphasis on recipients of large payments; trends in payments since 1985; and other characteristics of Federal farm subsidy recipients. The EWG database will also be used to analyze a wide range of policy proposals during the debate over the 1995 Farm Bill, including payment limits and budget reductions.
Data Sources, Methodology, and Database Development
Most of the studies in the series are based on original EWG analyses of more than 110 million computer records--a record of every check written to every recipient, for every Agricultural Stabilization and Conservation Service (ASCS, now known as the Consolidated Farm Service Agency, or CFSA) program, in every year since 1985. The records were obtained in two steps.
Beginning in 1992, EWG filed a series of information requests with USDA under the Federal Freedom of Information Act (FOIA). Among the initial requests, we asked for most of the manuals that USDA personnel utilize in implementing all major farm, disaster and conservation assistance programs. After reviewing the manuals, EWG identified and requested dozens of datasets in computerized form, mostly from ASCS, now known as CFSA. The department's computer center in Kansas City fulfilled initial requests by providing data from the Producer Payment Recording System (PPRS) on about forty, 9-track computer tapes, which contained records of payments according to the county from which the payment originated. More recently, data have been provided on high density 4 mm DAT storage tapes. In addition, EWG has obtained another 17 gigabytes of raw data that pertain to subsidy recipients, conservation payments by practice, and characteristics of program farms.
Once received, EWG transfers the raw data files onto our Power Macintosh computers for further processing, compilation, quality control and analysis. The data presented in City Slickers, for example, is generated from a customized, point-and-click database application developed by EWG's computer programmers that can access and analyze 24 gigabytes of data.
EWG requested and USDA developed an algorithm or "code" that scrambled the identifying numbers of recipients, so that payments and other information could be tracked and analyzed by recipient over all years and all programs. The recipient data were then compiled to obtain program-by-program totals for each individual, corporation or other entity receiving farm subsidies in any year from 1985 through 1994. Data were also aggregated to obtain total, per-program, per-year and per-recipient payments for the nation, as well as for each county, state, and congressional district in the country. The database used for City Slickers includes more than $106 billion-worth of farm subsidy payments issued by USDA between January 1, 1985 and September 30, 1994. Future studies will reflect the billions of dollars of additional farm subsidy payments made in the three-month period between October and December 31, 1994. As noted above, databases recently received under FOIA will also permit more detailed analysis of the composition of farm entities and the payments they received from 1985 to 1994.
In preparing City Slickers, producer-level payment data from the PPRS system were matched against the most current, permanent mailing addresses on file with USDA for all official communication, including payment of farm subsidy checks. USDA provided partial addresses--city, state, and zip code. This list itself comprised over 8 million address records contained on seven 9-track computer tapes.
Limitations of this Study
Potential Overcounting of City Slickers
As noted above, the Environmental Working Group checked USDA's most recent mailing list for any recipient who had received payments since 1985. USDA maintains a current list of addresses, but if a mailing address is changed the department does not consistently maintain the old address. In this analysis, EWG presents payments made to farm program recipients whose current address is in one of the country's top 50 cities. These data limitations necessitate an EWG assumption that program recipients have received all payments recorded since 1985 at the current address on file with USDA. Obviously, some unknown number of recipients may have received payments at previous addresses over the 10-year period, including farm addresses, that are no longer maintained by USDA. This assumption therefore has the potential to overestimate (or possibly underestimate) the number of program recipients in big cities--or for that matter at any mailing address on file with USDA. On the other hand, under law and USDA rules and regulations, any recipient could have lived in a big city, or anywhere else, over the entire 10-year period and still would have been able legally to receive Federal farm subsidy checks--from an eligible farm anywhere.
Potential Undercounting of City Slickers
For a number of reasons, and notwithstanding the potential overcounting problem described previously, this study almost certainly underestimates the number of urban recipients of farm program payments. We believe the underestimation is substantial.
Many recipients did not have a mailing address zip code. We checked every USDA recipient that had received even a single payment since 1989 (3.2 million recipients total) against the list of more than 8.2 million mailing addresses on file with USDA as of September, 1994. After completing the match of the two files, we found that we did not have a city, state or zip code listing for nearly 365,000 recipients that had received 4.9 million checks totaling $4.099 billion since 1985. In addition, for 5,372 recipients who had listings on file, we could not reconcile the city, state, and zip code information against a recent U.S. Postal Service-certified directory of zip codes (available on CD-ROM). These recipients--for whom a known mailing address was not found--received over 94,000 checks totaling more than $100 million. Thus, EWG was unable to determine an address for about $4.2 billion-worth of Federal farm subsidy payments (4 percent of the total) made to some 370,000 recipients since 1985. Some of the recipients for which addresses were not found may reside in one of the top 50 cities.
We did not examine all cities and suburbs. In this report, EWG analysis is limited to recipients whose current mailing address for USDA checks is in the postal area of one of the 50 most populous cities in America. Obviously, the inclusion of additional cities would have increased the number of urban recipients, checks and payments, though many smaller cities are in closer proximity to agriculture, and more of the payments would be expected to originate within the state. In addition, in many cities--Los Angeles, San Francisco, New York and Chicago are good examples--postal areas encompass a fairly small portion of the greater metropolitan area. We analyze and present separately in the report several tabulations for suburbs and satellite cities and towns for 28 major urban areas, but not for all 50 cities considered in this report. Inclusion of suburbs often resulted in a significant increase in the number of recipients, checks and payments reported as urban residents.
Farm subsidies disbursed through corporations, trusts and other entities or transferred between individuals, could not be traced with available data. At the time this report was prepared, the EWG database could only track payments made directly to recipients whose scrambled identifying numbers were matched to a verifiable city, state or zip code. We were unable to track the "indirect" payments made to urban and suburban residents or other absentee interests. USDA payments can be sent directly to a corporation, trust or other entity at one address, and then disbursed to others with an interest in the farm. For example, farm subsidy checks might be sent to a revocable trust, the mailing address of which is a small town near the farm that has participated in a subsidy program for many years and has received substantial funds. The trust might then divide and disburse payments to trustees living anywhere, including distant cities. The EWG database cannot (at this stage) trace such transactions, but USDA experts and other agriculture program specialists inform us that such arrangements are very common. This inability to trace indirect farm payment transfers has almost certainly resulted in a significant underestimate of subsidy payments to city residents. 1
1 One anecdotal bit of evidence of such indirect payments came to light as we were preparing this study. A number of journalists visited the EWG computer center to learn about our farm subsidy database. Of the first eight reporters who visited, one of our analysts noted, two remarked that they had received farm program payments via the families of their spouses. They did not know what programs the payments were made under, nor even were they certain of the location of the farm beyond what state it was in. Nor was it clear that they had ever actually visited the farms. But every so often a check appeared, they said, representing the spouse's share of a farm program payment that had been disbursed from a trust or other entity located hundreds of miles from their current place of residence. This is precisely the type of transaction that EWG was unable to track in City Slickers.