Freedom to Farm

An analysis of payments to large agribusiness operations, big city residents, and the USDA bureaucracy

Thursday, February 1, 1996

by Kenneth A. Cook, President; Mark B. Childress, Vice President for Policy; Richard Wiles, Vice President for Research

Freedom to Farm

An analysis of payments to large agribusiness operations, big city residents, and the USDA bureaucracy

The "Freedom to Farm" legislation, approved by a partisan vote of the House Agriculture Committee, will be taken up by the House of Representatives soon after it reconvenes on Tuesday, February 27. The Senate has already passed a version of the bill. In its current form, the "Freedom to Farm" bill will be one of the most generous Federal farm subsidy programs ever considered in the U.S. House of Representatives.

  • Because of surging market prices for subsidized crops over the past 6 months, and robust long-term export demand projections for U.S. crops, most analysts now agree that the guaranteed payments authorized by the House Republican "Freedom to Farm" bill will result in a massive increase in government farm subsidy costs relative to simple extension of current laws.
  • According to USDA's latest (Feb. 21) budget projections, extension of existing farm programs would result in government outlays of $12.2 billion over the next 7 years, compared to $35.6 billion in fixed, guaranteed payments under the House Agriculture Committee's "Freedom to Farm" bill.
  • Four factors make "Freedom to Farm" one of the most generous Federal farm subsidy programs in history. First, the bill will commit taxpayers to very large government payments at a time when subsidy recipients will also receive exceptionally high market prices for crops. Current law would have zeroed out payments for several crops in 1996 and probably in 1997. Second, the bill guarantees subsidies for 7 years instead of the traditional 5 years. Third, "Freedom to Farm" bases future payments entirely on past eligibility, eliminating the requirement that recipients be active farmers or managers in order to receive subsidies. Finally, the bill in effect allows subsidy recipients to keep $1.7 billion in Federal payments from previous years that would have been repaid to taxpayers under existing law.
  • "Freedom to Farm" does not end or phase out farm subsidies. CBO's baseline projects continued, $4 billion annual outlays for farm subsidies after Freedom to Farm "expires" in 2002. This $4 billion is equivalent to spending levels in years 6 and 7 of the bill.
  • EWG estimates that the top 2 percent of "Freedom to Farm" subsidy recipients will be eligible to receive an estimated $7.8 billion over 7 years, 22 percent of total payments. The average payment to 28,000 operations in the top 2 percent will be $281,000 over 7 years -- or more than $40,000 per year in guaranteed payments with no work requirement and no means test. This compares to an estimated $26,000 for the average recipient. At least 368 recipients will be eligible for more than $1,000,000 over 7 years.
  • The top 2 percent of recipients in Arizona, mainly partnerships and joint ventures, will be eligible for an average of $1.6 million in "Freedom to Farm" payments over 7 years. In Mississippi, the top 2 percent of recipients will average over $1 million.
  • Top 2 percent of rice recipients will be eligible to collect $677,000 apiece over 7 years; top cotton producers, an average of $419,000 over 7 years.
  • The top 10 states for "Freedom to Farm" payments, and the average amount paid to the top 2 percent of recipients in each of those states over 7 years, are as follows (Table 1).
  • EWG estimates that over 37,000 individuals, corporations, joint ventures and other recipients with mailing addresses in America's 50 largest cities will be eligible for an estimated $365 million in "Freedom to Farm" payments. Many recipients in large cities will be eligible for hundreds of thousands of dollars. Because all farming requirements are eliminated, "Freedom to Farm" will increase the number of subsidized, absentee farmers. EWG estimates that at least $1.1 billion in "Freedom to Farm" payments will be made to recipients who do not reside in the same state in which subsidized farms are located.
  • EWG analysis indicates that over 18,000 recipients in the local USDA bureaucracy -- full-time employees and farmer "committeemen" -- will be eligible for more than $785 million. These recipients will be eligible for an average of more than $42,000 over 7 years, almost $17,000 (65 percent) more than the average recipient. An estimated $22 million will be paid to 1,105 full-time, permanent county employees.
  • "Freedom to Farm" also perpetuates the peanut, sugar and dairy programs that cost consumers billions of dollars in increased food prices each year.
  • By retaining provisions that cap spending, but reducing the level of "Freedom to Farm" payments, Congress could provide billions of dollars over the next 7 years to rural areas for water and sewage treatment, housing construction, and conservation and environmental protection programs. Congress could also use some of the savings for deficit reduction.

Table 1: Top ten states for "Freedom to Farm" payments

Rank by total estimated Freedom to Farm payments State Estimated Freedom to Farm payments ($ billions) Estimated avg. 7-yr. payment to top 2 percent $ per recipient
1 Iowa $3.51 $188,000
2 Texas $3.29 $335,000
3 Illinois $2.80 $188,000
4 Nebraska $2.75 $233,000
5 Kansas $2.72 $236,000
6 Minnesota $2.03 $212,000
7 North Dakota $1.76 $222,000
8 Arkansas $1.69 $601,000
9 California $1.29 $800,000
10 Indiana $1.28 $202,000

Foreword by Kenneth A. Cook

Suppose you're an editor or a reporter who suddenly falls victim to corporate downsizing at the newspaper, magazine, television network or radio station where you work. You'd probably appreciate a new Federal program that will keep you whole with guaranteed payments of tens of thousands of dollars per year, every year, for the next seven years. You might get as much as one million dollars from the government, in total. And you'll get your Federal checks on top of whatever severance payments you get from your employer. In fact, you'll get government payments for 7 years even if you're fortunate to find a new job right away that pays more than the job you lost.

Or let's say you're a manufacturing worker who loses your job because of a factory closing or workplace automation. How about a Federal program under which Uncle Sam will pay you $20,000, $30,000, $40,000 or more every year from now through the year 2002, with no requirement that you get another job? Better yet, under this program even if you do get a job you'll still get the government payments--and your spouse may well get the same amount or more.

Or perhaps you'd just like to retire to a sunny resort spot right now -- even if you're only thirty-something. This Federal program will support you while you do absolutely nothing--a guaranteed Federal annuity of as much as $300,000, $400,000, or more, payable over the next 7 years.

It may sound like "Publisher's Bonanza," but in fact it's public policy -- from the new Congress. And sorry, taxpayer: only past farm subsidy recipients are eligible. The rest of us lose -- big.

It's a Federal farm subsidy "reform" proposal called "Freedom to Farm." Ed McMahon and Dick Clark won't be picking the big prize winners. Congress will.

If "Freedom to Farm" becomes law, Congress will be sending out checks for $35.6 billion, written against your account, taxpayer, to a handful of Americans who will qualify for "Freedom To Farm" payments over the next 7 years.

Under the preposterous rules of this new subsidy game, the only way to win is if you've won before. That's right: only past farm subsidy recipients are eligible for "Freedom to Farm" payments. And the bigger the payments they've received in the past, the bigger the checks they'll get through 2002 under "Freedom to Farm." Some recipients stand to get more than $1 million over 7 years. They won't have to plant a seed to earn it. But if they or the tenants they leave back on the farm do raise a crop, they'll receive government subsidy checks in addition to huge profits from the marketplace, where prices are higher than they've been in years. "Freedom to Farm" subsidies will be made entirely without reference to economic need or market conditions.

For the average taxpayer, the proposition goes something like this: you're taking a pay cut so that anyone who has received a farm subsidy payment over the past 5 years will automatically receive a continuous stream of welfare payments over the next 84 months, even if they get a job that pays as much as yours pays, or even if they don't work at all.

In this report we focus on some of the biggest and most outrageous winners of "Freedom to Farm." These recipients will be familiar to readers of previous EWG studies of agriwelfare, City Slickers, Fox in the Henhouse, and The Cash Croppers. They're the "farmers" who live in the middle of America's biggest cities. They're the federally-paid employees and farmer-committee members of the USDA bureaucracy who will get "Freedom to Farm" payments through the very programs they administer. And they are the super-big winners: the top two percent of Federal farm subsidy recipients--roughly 28,000 large agribusiness operations, corporations, joint ventures and assorted "paper farms" that will haul in more than 22 percent of "Freedom to Farm" payments -- $7.8 billion in all, averaging more than $40,000 apiece per year.

We also debunk some of the misconceptions about the "reforms" represented by "Freedom to Farm." "Freedom to Farm" does not cut farm subsidies, it increases their cost by billions and stretches payment guarantees from 5 to 7 years. "Freedom to Farm" does not end farm subsidy programs, or even phase them out: at least $4 billion will be available per year for farm subsidies after the program expires in 2002. "Freedom to Farm" also does not allow farmers to plant freely for the market instead of for the government. And "Freedom to Farm" does not end any of the well-known abuses and inequities of current programs, which are a goldmine for corporate subsidy loophole artists. In fact, it makes past rules worse by divorcing payments entirely from market conditions, actual farming activity, or economic need.

A sensible reform bill would retain a safety net for bona fide, working family farmers. It would shift billions of taxpayer dollars out of "Freedom to Farm" payments and reinvest those funds in the real needs of rural America. Affordable housing. Help for small businesses. Clean streams and safe tap water. Reduced use of pesticides. Protection of threatened and endangered species.

Then again, if you're the type of taxpayer who likes your government big, dumb, and free-spending, "Freedom to Farm" is the subsidy reform for you.

Kenneth A. Cook
President
Environmental Working Group

Chapter 1.  "Freedom to Farm":  A Closer Look

"Obscene." That is the word often used by insiders -- policymakers, agriculture committee staff, farm journalists, farmers themselves -- to describe the subsidy payments offered under "Freedom to Farm."

Insiders know that "Freedom to Farm" is not a budget cut. It's an incredibly lucrative, 7-year subsidy handout for farmers, especially big farmers. And insiders know the proposal is not the end of farm welfare, because a huge chunk of money remains in the budget after the 7-year period, available for divvying up among subsidy recipients. (We offer a reality test to observers of national politics who may think otherwise. How does the following statement strike you as you read it out loud: "Bob Dole and Pat Roberts are pushing to slash farm subsidies and end farm programs, and nearly every major farm group in the country supports them.") And insiders know that the bill hardly gets the government out of dictating what farmers can or cannot plant. "Freedom to Farm" contains nearly as many restrictions on who-can-plant-how-much-of-what-where as current law, the model for which sometimes seems to have been the old Soviet 5-year plans. Well, at least they're old in the former Soviet Union.

This chapter debunks the main, supposed merits of "Freedom to Farm" as a reform proposal.

"Freedom to Farm" Doesn't Cut Farm Subsidies--It Increases Them

Perhaps the most misunderstood aspect of "Freedom to Farm" is its impact on Federal farm subsidy levels. At the beginning of the 104th Congress, many legislators, Republicans in particular, promised to severely slash if not eliminate Federal farm subsidies. Does "Freedom to Farm" do that?

It's not even close.

On the eve of the House debate on the bill, however, it is clear that "Freedom to Farm" is going to cost taxpayers much, much more than they would pay if existing programs, extravagant though they are, were simply renewed.

"Freedom to Farm" isn't business as usual. Business has never been so good for agriwelfare recipients or so bad for taxpayers.

According to the Department of Agriculture's most recent projections (issued on Wednesday, February 23 at the Department's annual Outlook Conference), extension of current Federal farm subsidy programs would result in payments of $12.2 billion over the next 7 years. By comparison, the "Freedom to Farm Act" requires taxpayers to spend $35.6 billion over the next 7 years regardless of market conditions or crop prices. In other words, this so-called "reform" will cost taxpayers $23 billion more over the next 7 years than they would have to spend if Congress simply extended current law (Figure 1).

Figure 1: Recent USDA estimates for deficiency program spending project that "Freedom to Farm" will cost taxpayers nearly three times more than under current law.

line chart

 

Source: Environmental Working Group. Compiled from USDA data.

 

Based on a history of underestimates by both USDA and the Congressional Budget Office (CBO), USDA's projections are probably too low, not necessarily for 1996 through 1998, when crop prices are almost certain to remain high, but possibly for the years 1999-2002. In the case of the 1990 Farm Bill, for example, taxpayer costs over the 5 years turned out to be one-third higher than estimated at the time of enactment. CBO will not issue its next "baseline" projection for agriculture until March, but its November baseline estimates were significantly lower than the initial CBO baseline in 1995. However, even assuming a 50 percent underestimate on the part of USDA, the department's new baseline for extension of current programs would still be only about half the taxpayer costs that are guaranteed to be incurred under "Freedom to Farm" ($18.3 billion compared to $35.6 billion).

In budgetary terms, billions of taxpayer dollars could be shifted from "Freedom to Farm" payments and invested in job development, conservation and environmental protection in rural America, could be devoted to deficit reduction, or could be apportioned to some combination of the two. Enough funds would remain for a safety net, giving farmers subsidy payments roughly equivalent to those they would receive under current law.

As the House nears final action on the Farm Bill virtually all analysts agree that tightening global grain stocks, and resultant strong market prices, will make "Freedom to Farm" more costly than the status quo. The sudden high cost of the major subsidy "reform" proposal has had some fairly hilarious effects on the farm policy debate. For most of the past year, Democratic supporters of farm subsidies and the Clinton Administration have argued against Republican farm proposals, including "Freedom to Farm," on grounds that farm subsidies would be cut too deeply. Now it turns out that much deeper cuts would result from the status quo they've been defending. Last fall, a few farm groups supported the Democrats in opposing "Freedom to Farm" (rice and cotton interests most vocally). But having put pencil to paper and totaled up the cash bonanza, virtually all farm groups now support Freedom to Farm.

Republican proponents of "Freedom to Farm" have consistently defended the proposal to their farm constituents -- though not to urban journalists -- on grounds that it will actually result in greater expenditures than extension of current programs. In fact, House Agriculture Committee Chairman Pat Roberts has gone so far as to argue that "Freedom to Farm" is the best way to guarantee that government payments will be made at all for many crops in 1996. (Another factor that would reduce government subsidies under current programs compared to "Freedom to Farm," specifically in Kansas, is a poor 1995 wheat crop and prospects for low yields again in 1996 due to unusually dry conditions.)

The promise of big cash subsidies on top of robust returns from the market makes for an awkward argument for the many anti-subsidy Republicans in Congress, including the House leadership itself. House Budget Committee Chairman John Kasich, Majority Leader Dick Armey, even Speaker Gingrich are avowed "reformers" who claim to want reduced government involvement and spending in agriculture. However, not since President Reagan signed the budget-busting 1985 Farm Bill have budget-slashing, free-market Republicans constructed such a costly, big government approach to farm policy.

But the policy solution is as clear as the politics are muddled. Congress should retain the overall Freedom to Farm caps and phase-down schedule, with firm termination of the programs after 7 years. But the Freedom to Farm payments should be reduced sharply, particularly over the next 3 years, and the funds devoted to other needs in rural America.

"Freedom To Farm" does not end farm entitlements

From a budgetary standpoint, the most important reform in "Freedom to Farm" is that it caps total direct payments to farmers at fixed levels for each of the next 7 years. As noted above, those caps offer little consolation to taxpayers, considering that the amounts are far, far above what we would have to pay under current programs. Still, those who desperately want to think of "Freedom to Farm" as reform argue that the spending caps, and year-by-year reductions in spending, constitute a "phase-out" or end in farm program spending. More than a few journalists bought this reasoning when "Freedom to Farm" was unveiled.

But the Congressional Budget Office does not score "Freedom to Farm" as thought it were the "end" of farm subsidies. At the end of 7 years, CBO officially assumes (i.e., projects) continued spending at a rate of $4 billion per year in the farm subsidy accounts. That spending is assumed even without permanent law to authorize the payments (permanent law was retained in the Senate farm bill that will go to Conference with the House version). And the CBO baseline beyond 2002 equals the "phased-down" amount in the "Freedom to Farm" spending schedule for the last two years of the bill ($4 billion). Legislators from farm districts and states will find it awfully difficult to turn over $4 billion to deficit reduction or any other nonfarm purpose in 2003 and beyond.

A final point: "Freedom to Farm" leaves the peanut, sugar and dairy programs intact, perpetuating the multi-billion dollar tax that those programs impose on American consumers.

Farmers will not be "free" to plant for the market instead of the government

Farmers will actually face many restrictions on what they can plant under "Freedom to Farm." On 85 percent of their acreage they are prohibited from growing any fruits or vegetables. If farmers grow alfalfa (an important crop for enriching soil and feeding livestock) on more than 15 percent of their "Freedom to Farm" acres, they forfeit their government payments on every acre they grow it on. Farmers will be able to grow hay for livestock, or graze livestock on "Freedom to Farm" acres, but only under basically the same restrictions that now apply.

What is likely to happen under "Freedom to Farm" is a shift of a few million acres in the planting patterns for corn, soybeans, rice and cotton -- a fraction of the total acreage planted to those crops. Why so little exercise of "freedom"? Because farmers already have considerable flexibility under current laws to accommodate crop rotation among subsidized program crops. And in many places where water is a limiting factor (dryland wheat and cotton areas, primarily), if farmers continue to grow crops at all under "Freedom to Farm," it will be the same crops they grow now.

"Freedom to Farm" does repeal the provisions in current law under which the secretary of agriculture can require farmers to take some of their land out of production in return for subsidy payments. This so-called "set-aside" authority has been used in past programs less to balance supply with demand, than to reduce the crop production (i.e., acreage) on which USDA has to make subsidy payments. That is to say, set-asides save taxpayers money in the framework of conventional programs; eliminating set-aside authority in that context would have increased program costs dramatically during the past decade. The annual outlay caps and fixed payments to farmers under "Freedom to Farm" render set-asides unnecessary as a cost control tool. Elimination of set-aside authority should thus be viewed primarily as a full-production insurance policy that will benefit grain companies and suppliers of farm inputs like pesticides and fertilizers.

About EWG's Estimates of "Freedom to Farm" Payments

Environmental Working Group's estimates of "Freedom to Farm" subsidy payments are the result of an original analysis of computerized data files obtained by EWG from the U.S. Department of Agriculture through a series of requests filed under the Federal Freedom of Information Act. EWG's USDA subsidy database consists of 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 from 1985 through 1994 -- totaling more than 110 million checks over ten years. The database, which is about 50 gigabytes in size (including our Freedom to Farm estimates), was used to prepare previous EWG reports (City Slickers, Fox in the Henhouse, and The Cash Croppers).

"Freedom to Farm" does not end farm entitlements. Rather, it sets a guaranteed level of farm program spending, to be divided among all eligible recipients, for each year from 1996 through 2002, as follows:

"Freedom to Farm" spending.

   
Subsidy Payments 1996 1997 1998 1999 2000 2001 2002 Total
($ billions) $5.570 $5.385 $5.800 $5.603 $5.130 $4.130 $4.008 $35.630

Regardless of the number of individuals, corporations, joint ventures and other entities that quality for and receive the subsidies, the total amount of federal spending will not vary from the levels mandated by "Freedom to Farm." Moreover, the bill stipulates a precise percentage of subsidy payments to be allocated by each of 7 crops, as follows:

"Freedom to Farm" payment allocation, by crop.

Wheat Corn Grain Sorghum Barley Oats Upland Cotton Rice
26.26% 46.22% 5.11% 2.16% 0.15% 11.63% 8.47%

The fixed nature of taxpayer expenditures over 7 years, independent of market conditions or the financial needs of farmers, combined with the precise allocation of payments among crops, facilitates estimates of "Freedom to Farm" payments in future years. The only eligibility requirement for "Freedom to Farm" payments is that the recipient has been dependent on farm subsidies in the past. In order to estimate the number of potential "Freedom to Farm" payment recipients, EWG identified all deficiency payment recipients for calendar years 1990 through 1994: we found a total of 1.38 million recipients, including individuals, corporations, general partnerships, joint ventures and other entities. We used these participants as a proxy for the 1991-1995 eligibility criteria set forth in "Freedom to Farm" (payment data for 1995 were not available). EWG assumed that every recipient of at least one deficiency payment during calendar years 1990 through 1994 would choose to receive "Freedom to Farm" payments over the next 7 years. We believe this is an reasonable assumption, considering that, other than past participation, there are no real requirements for the 7 years' worth of payments offered by "Freedom to Farm." What past participant would pass up unencumbered government checks for the next 7 years? If it turns out that fewer of the past recipients apply for "Freedom to Farm" than we assume in the analysis, our estimates of payments per recipient will be too low. For the same reason, the actual regional distribution of payments if "Freedom to Farm" becomes law also may differ somewhat from our estimates.

In order to estimate potential "Freedom to Farm" subsidies by region, EWG estimated the total amount of "Freedom to Farm" payments that would accrue to each of the 1.38 million recipients of deficiency subsidies from 1990 through 1994. We assumed that each recipient's share of total deficiency payments for a given crop for calendar years 1990 through 1994 would be proportional to that recipient's share of total "Freedom to Farm" payments from 1996 through 2002. These assumptions are consistent with the requirements of "Freedom to Farm," which makes payments to each recipient proportionate to that recipient's share of total program production (program base acreage multiplied by program yields) for each crop. Program production was the measure used by USDA to calculate subsidies over the past 5 years; under "Freedom to Farm," it will continue to be the measure of subsidies for the next 7 years.

Based on our estimates of what each recipient will be eligible to receive under "Freedom to Farm," we tabulated total potential payments in every county, state, and congressional district in the country, as well as for the nation as a whole. Separate tabulations were made for each crop and region.

In estimating the number of "Freedom to Farm" subsidy recipients over the next 7 years, EWG did not attempt to estimate the number of Conservation Reserve Program (CRP) participants who may elect to receive "Freedom to Farm" payments when their CRP contracts expire. The primary reason for not making such estimates is the difficulty of predicting how many CRP contracts actually will lapse, since it is reasonable to assume (from Senate action on the Farm Bill and Administration intentions) that a substantial number of CRP contracts will in fact be extended. Similarly, EWG did not estimate the number of recipients who may be eligible for "Freedom to Farm" subsidies, but did not choose to receive deficiency payments over the past 5 years, and therefore did not appear in USDA deficiency program data; nor did EWG estimate the number of individuals who received a deficiency payment over the past 5 years, but subsequently ceased farming and lost eligibility for "Freedom to Farm" payments. For these reasons, EWG estimates of participation rates in a given region may differ from the actual participation rates. EWG's estimates of total spending for the nation are in accord with spending levels stipulated in the bill.

Chapter 2.  Cash Croppers:  What "Freedom to Farm" Will Pay to the Top 2 Percent of Subsidy Recipients

When it comes to Federal farm subsidy programs, size definitely counts. The bigger the farm, the bigger the payments. "Freedom to Farm" remains true to the farm policy tradition of rewarding the big boys and squeezing the little guy out.

In a report EWG released last year (The Cash Croppers) we found that between 1985 and 1994, American taxpayers made payments totaling $108.9 billion through Federal farm subsidy programs. But just 2 percent of the programs' recipients -- only about 60,000 corporations, partnerships and individual farmers -- received an astronomical 26.8 percent of all subsidy payments, $29.2 billion in all. Over 10 years, the top 2 percent pulled in $485,000 each, on average, and were in the programs 9.3 years out of 10.

We found a similar phenomenon in the distribution of deficiency payments. Just 2 percent of those who received payments between 1985 and 1994 (39,000 out of 1.96 million recipients) pulled in more than $15.7 billion, 22 percent of all deficiency payments. The big deficiency payment recipients received an average of just over $400,000 over the 10-year period -- 11 times more than the average recipient.

As we noted in The Cash Croppers, our analysis of payment concentration almost certainly underestimated the extent to which big farm operations capture Federal farm payments. Many of the individuals, corporations, joint ventures and other entities we identified as top recipients get even more money than we could readily determine from USDA records. How? Via "Mississippi Christmas tree"-style paper farms, concocted by lawyers to harvest the maximum amount of Federal farm bucks while complying with notoriously loophole-ridden, Federal "payment limitation" rules.

A huge portion of the "Freedom to Farm" payments will be made to a handful of large farm operations, corporations, joint ventures, trusts and other business ventures. As we noted in Chapter 1, "Freedom to Farm" is excessively generous, even by the lavish standards of farm policy. Recipients will get billions more than they would have received with a simple extension of current law. And they'll get payments -- and protection from budget cutters -- for 7 years, instead of the traditional 5 years provided by recent Farm Bills. Not one of these recipients will be required to farm a single acre of land; they will qualify for "Freedom to Farm" payments simply because they received subsidy payments at least once in the last 5 years. "Freedom to Farm" as originally unveiled was supposed to significantly tighten payment limitation policy for farm subsidies. All that got dropped, of course, except for a lowering of the existing payment limit to $40,000. Like most analysts, we consider that "reform" to be an easily evaded joke. We do not factor it into our analysis of payments to big recipients.

A Few Big Farms Will Reap A "Freedom to Farm" Windfall

We analyzed potential payments to the top 2 percent of deficiency payment recipients, based on the 1990-1994 period. Here is what we found:

  • The top 2 percent of all recipients -- fewer than 28,000 large agribusiness operations and "paper" farms -- will be eligible to receive an estimated $7.8 billion under "Freedom to Farm." On average, these top recipients could receive $281,000 each in subsidy payments over the next 7 years, or more than $40,000 per year in guaranteed Federal payments. Top recipients will be eligible to receive 11-times more in subsidies than the average recipients (Figure 2).
  • At least 368 recipients will be eligible for more than $1,000,000 each in "Freedom to Farm" payments over the next 7 years. An additional 1,614 recipients will be eligible for at least $500,000 apiece over the next 7 years.
  • Under "Freedom to Farm," EWG estimates that 3,905 recipients will be eligible to receive, on average, $50,000 or more each year over the next 7 years.

Figure 2: The top 2 percent of "Freedom to Farm" recipients will be eligible for an average of $281,487 each from 1996 through 2002

bar chart

 

Source: Environmental Working Group. Compiled from USDA data.

 

Bear in mind again, these recipients will have no requirements whatsoever to perform any farming activities.

Summary by Crop

For each major crop, the top 2 percent of "Freedom to Farm" subsidy recipients stand ready to receive enormous subsidies over the next 7 years.

Rice. EWG estimates that just 864 rice subsidy recipients -- primarily partnerships, joint ventures and corporations -- will be able to collect an average, estimated $677,000 apiece under "Freedom to Farm" over the next 7 years ($585 million total). That would amount to nearly $97,000 per recipient, per year, for 7 years.

Upland Cotton. We estimate that the top 2 percent of upland cotton program recipients -- just 2,776 very large farming operations -- will each be eligible to earn nearly $419,000 over the next 7 years under the House Agriculture Committee bill. That amounts to an average of more than $59,800 per recipient, per year, for 7 years.

Corn. The top 2 percent of all corn subsidy recipients, fewer than 18,300 operators, will be eligible to receive a total of $3.34 billion under the House "Freedom to Farm" Bill. That amounts to $183,000 per recipient, on average, more than $26,000 per year.

Wheat. Farm subsidy payments to the top 2 percent of wheat subsidy recipients -- about 14,500 large scale operators -- should average more than $161,000 apiece over 7 years (about $23,000 per year).

State Breakdown

In Table 2, we present the average subsidy for which the top 2 percent of recipients will be eligible under "Freedom to Farm" in every state. In Arizona the average payment for which top recipients will be eligible tops $1.6 million; in Mississippi, the biggest recipients will get over $1 million from U.S. taxpayers over 7 years.

Table 2: The top 2 percent of all "Freedom to Farm" recipients will each be eligible for an estimated $281,000 over the next 7 years

State Total estimated Freedom to Farm subsidies, 11996-2002 Rank, by total estimated subsidies Number of recipients among top 2 percent Subsidy per recipient among top 2 percent, 1996-2002 Percent of total subsidies to top 2 percent, 1996-2002  
Alabama $222,574,392 29 229 $ 371,116 38%  
Alaska $523,169 48 1 $ 52,062 10%  
Arizona $297,289,422 25 44 $ 1,674,971 25%  
Arkansas $1,693,863,076 8 590 $ 601,411 21%  
California $1,285,304,939 9 297 $ 800,350 18%  
Colorado $622,955,118 21 416 $ 288,753 19%  
Connecticut $3,526,788 44 5 $ 157,637 22%  
Delaware $15,411,023 40 11 $ 230,033 16%  
Florida $40,091,225 37 61 $ 185,004 28%  
Georgia $354,160,419 23 331 $ 233,258 22%  
Idaho $415,534,831 22 265 $ 340,175 22%  
Illinois $2,809,178,904 3 2,782 $ 187,759 19%  
Indiana $1,281,778,489 10 1,271 $ 202,450 20%  
Iowa $3,513,099,527 1 2,685 $ 187,651 14%  
Kansas $2,723,524,296 5 2,552 $ 236,139 22%  
Kentucky $269,978,094 27 599 $ 142,958 32%  
Louisiana $890,638,762 15 493 $ 443,670 25%  
Maine $3,610,699 43 13 $ 73,463 26%  
Maryland $67,835,710 35 60 $ 241,524 21%  
Massachusetts $1,288,924 46 4 $ 76,606 24%  
Michigan $659,557,493 19 623 $ 228,365 22%  
Minnesota $2,030,780,941 6 1,409 $ 212,504 15%  
Mississippi $898,772,566 14 294 $ 1,028,382 34%  
Missouri $949,244,720 13 1,136 $ 193,286 23%  
Montana $865,629,399 16 450 $ 299,516 16%  
Nebraska $2,752,358,217 4 1,883 $ 233,135 16%  
Nevada $4,188,615 42 6 $ 180,101 26%  
New Hampshire $1,076,041 47 3 $ 89,534 25%  
New Jersey $18,220,211 39 12 $ 211,153 14%  
New Mexico $135,279,475 32 79 $ 325,936 19%  
New York $184,628,259 31 185 $ 219,419 22%  
North Carolina $282,933,977 26 466 $ 175,063 29%  
North Dakota $1,755,759,622 7 1,099 $ 222,213 14%  
Ohio $864,232,108 17 993 $ 184,337 21%  
Oklahoma $1,034,070,759 12 1,030 $ 193,404 19%  
Oregon $227,431,880 28 144 $ 323,309 20%  
Pennsylvania $106,175,325 33 178 $ 137,925 23%  
Rhode Island $8,114 49 1 $ 1,691 21%  
South Carolina $197,522,096 30 178 $ 305,965 28%  
South Dakota $1,050,030,660 11 968 $ 196,100 18%  
Tennessee $311,608,366 24 488 $ 204,091 32%  
Texas $3,286,987,337 2 2,127 $ 335,242 22%  
Utah $38,768,211 38 47 $ 214,108 26%  
Vermont $3,450,331 45 13 $ 45,946 17%  
Virginia $97,741,925 34 172 $ 163,659 29%  
Washington $633,726,675 20 312 $ 346,399 17%  
West Virginia $10,416,759 41 25 $ 113,464 27%  
Wisconsin $696,250,626 18 846 $ 178,749 22%  
Wyoming $43,388,074 36 53 $ 160,548 20%  
United States $35,626,000,000 - 27,619 $ 281,487 22%  

Source: Environmental Working Group. Compiled from USDA data.

Top 100 Recipients under "Freedom to Farm"

In Table 3, we list information we obtained from USDA for the 100 recipients that we believe will be eligible for the biggest payments under "Freedom to Farm." They are the biggest of the big that we could identify with available data. And all of the top 100 will be eligible to receive more than $1.5 million; 47 of which will be eligible to receive more than $2 million, and 7 of which appear eligible for $3 or more. For the most part, they are joint ventures and general partnerships -- a favored form of business entity among big rice and cotton operations.

Table 3: Each of the top 100 "Freedom to Farm" recipients will be eligible for an estimated $1.5 million, or more, in guarantee

Rank Type of recipient City to which checks are addressed State Zip code States in which farms are located Estimated Freedom to Farm subsidies, 1996-2002
1 Joint Venture GLENDORA MS 38928 - 0230 MS $4,340,283
2 General Partnership GILA BEND AZ 85337 - 9704 AZ $4,312,041
3 General Partnership WABASH AR 72389 - 0005 AR, MS $3,986,612
4 General Partnership BUCKEYE AZ 85326 - 0151 AZ $3,799,013
5 Unknown CHATHAM IL 62629 - 9758 IL $3,645,282
6 General Partnership BUCKEYE AZ 85326 - 9170 AZ $3,132,767
7 Joint Venture SUMNER MS 38957 - 0419 MS $3,043,292
8 General Partnership SCHLATER MS 38952 - 9765 MS $2,957,089
9 General Partnership BUCKEYE AZ 85326 - 5435 AZ $2,924,337
10 General Partnership NEWPORT AR 72112 - 0640 AR $2,808,974
11 General Partnership DALHART TX 79022 - 0001 TX $2,613,787
12 General Partnership CLEVELAND MS 38732 - 0369 MS $2,601,024
13 General Partnership DEVERS TX 77538 - 0576 TX $2,563,112
14 Joint Venture GUNNISON MS 38746 - MS $2,489,276
15 General Partnership GRADY AR 71644 - 8605 AR $2,482,001
16 General Partnership HOLLANDALE MS 38748 - 0043 MS $2,435,667
17 General Partnership BUTTONWILLOW CA 93206 - 9742 CA $2,407,221
18 General Partnership CRUGER MS 38924 - 9720 MS $2,402,085
19 General Partnership HOLLANDALE MS 38748 - 0109 MS $2,378,165
20 General Partnership PICKENS AR 71662 - 0147 AR $2,354,543
21 General Partnership DAYTON TX 77535 - 0100 TX $2,318,048
22 General Partnership BUCKEYE AZ 85326 - 0060 AZ $2,306,508
23 General Partnership DURHAM CA 95938 - 0427 CA $2,272,687
24 Joint Venture GREENWOOD MS 38935 - 0868 MS $2,217,423
25 General Partnership NICOLAUS CA 95659 - 9730 CA $2,192,749
26 General Partnership BUCKEYE AZ 85326 - 0160 AZ $2,175,273
27 General Partnership VANCE MS 38964 - 0037 MS $2,155,343
28 General Partnership MARKS MS 38646 - 0367 MS $2,121,926
29 General Partnership INEZ TX 77968 - 9728 TX $2,113,917
30 General Partnership BUCKEYE AZ 85326 - 2710 AZ $2,101,432
31 General Partnership BUCKEYE AZ 85326 - 0240 AZ $2,095,850
32 General Partnership WYNNE AR 72396 - 0786 AR $2,087,717
33 Joint Venture ROBINSONVILLE MS 38664 - 0098 MS $2,085,535
34 General Partnership SHAFTER CA 93263 - 1536 CA $2,082,756
35 General Partnership     38749 - 0095 MS $2,075,400
36 General Partnership TANNER AL 35671 - 0159 AL $2,074,150
37 General Partnership KATY TX 77492 - 0553 TX $2,069,975
38 General Partnership DANVILLE IL 61832 - 2303 IL, IN $2,065,135
39 Joint Venture MARKS MS 38646 - 0368 MS $2,063,377
40 General Partnership HANFORD CA 93230 - 9365 CA $2,054,237
41 General Partnership COURTLAND AL 35618 - 0356 AL $2,037,237
42 General Partnership TYLER AL 36785 - 0069 AL $2,036,816
43 Unknown CHOKIO MN 56221 - 9611 MN $2,029,930
44 General Partnership MER ROUGE LA 71261 - 9451 LA $2,016,482
45 General Partnership BUCKEYE AZ 85326 - 0090 AZ $2,011,194
46 General Partnership YAZOO CITY MS 39194 - 9217 MS $2,006,365
47 General Partnership RULEVILLE MS 38771 - 9601 MS $2,002,216
48 General Partnership STUTTGART AR 72160 - 9212 AR $1,992,491
49 General Partnership DAYTON WA 99328 - 0027 WA $1,974,482
50 General Partnership KATY TX 77492 - 1166 TX $1,970,643
51 General Partnership     38749 - 0095 MS $1,943,949
52 General Partnership LYON MS 38645 - 0158 MS $1,899,121
53 General Partnership LISSIE TX 77454 - 0608 TX $1,889,632
54 General Partnership INDIANOLA MS 38751 - 9646 MS $1,887,689
55 General Partnership CLARKSDALE MS 38614 - 9122 MS $1,846,314
56 General Partnership WAUKENA CA 93282 - 0025 CA $1,839,769
57 General Partnership DALHART TX 79022 - 0746 TX $1,821,586
58 General Partnership BUCKEYE AZ 85326 - 0142 AZ $1,810,354
59 General Partnership COLFAX WA 99111 - 9606 WA $1,806,151
60 General Partnership INDIANOLA MS 38751 - 2252 MS $1,803,839
61 General Partnership SPRINGFIELD CO 81073 - 1424 CO $1,795,628
62 General Partnership LIVE OAK CA 95953 - 9528 CA $1,778,707
63 General Partnership MAXWELL CA 95955 - 0368 CA $1,770,254
64 General Partnership SCHLATER MS 38952 - 9729 MS $1,768,434
65 General Partnership SHELBY MS 38774 - 0341 MS $1,745,595
66 General Partnership ANGUILLA MS 38721 - 0147 MS $1,742,882
67 Unknown     - MS $1,739,883
68 General Partnership LYON MS 38645 - 0504 MS $1,732,445
69 General Partnership DERMOTT AR 71638 - 9536 AR $1,730,875
70 General Partnership MOORHEAD MS 38761 - 9700 MS $1,728,253
71 General Partnership GRADY AR 71644 - 0528 AR $1,724,228
72 General Partnership BELZONI MS 39038 - 9620 MS $1,715,763
73 General Partnership SWAN LAKE MS 38958 - 0290 MS $1,707,635
74 General Partnership CHATHAM MS 38731 - 0215 MS $1,701,161
75 General Partnership HOCKLEY TX 77447 - 0008 MS, TX $1,700,531
76 General Partnership DODDSVILLE MS 38736 - 0025 MS $1,700,303
77 Joint Venture LULA MS 38644 - 0397 MS $1,698,695
78 Joint Venture WHARTON TX 77488 - 8182 TX $1,667,830
79 Joint Venture BUTTE CITY CA 95920 - 9417 CA $1,659,659
80 General Partnership BUCKEYE AZ 85326 - 1328 AZ $1,633,755
81 General Partnership BUNKIE LA 71322 - 0250 LA $1,610,237
82 General Partnership ROLLING FORK MS 39159 - 0247 MS $1,609,501
83 General Partnership NEWPORT AR 72112 - 9803 AR $1,608,222
84 General Partnership PARKDALE AR 71661 - 0126 AR $1,607,211
85 Joint Venture TUNICA MS 38676 - 9767 MS $1,602,679
86 General Partnership BRICKEYS AR 72320 - 0248 AR, MS $1,600,397
87 General Partnership ROLLING FORK MS 39159 - 2801 MS $1,598,043
88 General Partnership ATHENS AL 35611 - 9714 AL, TN $1,597,942
89 General Partnership BROOKSHIRE TX 77423 - 1050 TX $1,588,717
90 General Partnership PARKIN AR 72373 - 1070 AR $1,588,605
91 General Partnership TRUMANN AR 72472 - 9803 AR $1,587,211
92 Joint Venture EAGLE LAKE TX 77434 - 0071 TX $1,576,262
93 General Partnership HELENA AR 72342 - 9720 AR $1,568,848
94 General Partnership WADDELL AZ 85355 - 9734 AZ $1,568,077
95 General Partnership BAKERSFIELD CA 93307 - CA $1,565,338
96 General Partnership BELZONI MS 39038 - 0297 MS $1,561,557
97 General Partnership GARWOOD TX 77442 - 9601 TX $1,545,934
98 General Partnership CLARKSDALE MS 38614 - 0897 MS $1,543,484
99 General Partnership MERCED CA 95340 - 9639 CA $1,540,526
100 General Partnership RICHMOND TX 77406 - 0030 TX $1,519,529

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

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.

Table 4: More than 37,000 residents of America's 50 largest cities will be eligible for an estimated $365 million in "Freedom to Farm" Payments

City, State Estimated Freedom to Farm subsidies to city residents, 1996-2002 Number of Freedom to Farm recipients, 1996-2002 Rank by population
New York, NY $1,955,225 199 1
Los Angeles, CA $3,525,474 383 2
Chicago, IL $6,938,427 758 3
Houston, TX $22,606,303 2,966 4
Philadelphia, PA $213,583 47 5
San Diego, CA $3,375,828 530 6
Detroit, MI $443,903 103 7
Dallas, TX $20,910,540 2,446 8
Phoenix, AZ $23,927,003 873 9
San Antonio, TX $9,902,010 1,400 10
San Jose, CA $2,048,526 294 11
Baltimore, MD $598,055 110 12
Indianapolis, IN $8,415,814 1,178 13
San Francisco, CA $6,483,474 268 14
Jacksonville, FL $1,356,941 178 15
Columbus, OH $5,383,278 626 16
Milwaukee, WI $1,771,840 226 17
Memphis, TN $21,907,801 1,703 18
Washington, DC $1,615,688 207 19
Boston, MA $312,903 19 20
Seattle, WA $5,897,677 872 21
El Paso, TX $2,402,524 322 22
Cleveland, OH $454,370 105 23
New Orleans, LA $2,235,862 235 24
Nashville, TN $2,559,886 417 25
Denver, CO $14,624,809 1,792 26
Austin, TX $10,553,527 1,543 27
Fort Worth, TX $9,494,035 1,304 28
Oklahoma City, OK $14,924,024 2,330 29
Portland, OR $6,846,323 805 30
Kansas City, MO $11,153,387 1,787 31
Long Beach, CA $1,431,371 201 32
Tucson, AZ $8,550,239 747 33
Saint Louis, MO $10,172,170 1,641 34
Charlotte, NC $621,469 156 35
Atlanta, GA $2,654,360 335 36
Virginia Beach, VA $4,794,163 209 37
Albuquerque, NM $4,880,136 644 38
Honolulu, HI $544,422 71 39
Oakland, CA $954,193 97 40
Pittsburgh, PA $534,272 90 41
Sacramento, CA $19,785,363 611 42
Minneapolis, MN $10,931,403 1,507 43
Tulsa, OK $6,613,939 1,044 44
Cincinnati, OH $4,247,642 601 45
Miami, FL $1,388,919 184 46
Fresno, CA $31,345,438 567 47
Omaha, NE $29,504,720 2,775 48
Toledo, OH $999,544 203 49
Buffalo, NY $189,470 49 50
   
Total, top 50 cities $364,982,276 37,758

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.

Table 5. Each of the top 100 projected subsidy recipients who live in cities will be eligible for an estimated $270,000 or more

Rank Type of recipient City to which checks are addressed Zip code States in which farms are located Estimated Freedom to Farm subsidies, 1996-2002
1 General Partnership Phoenix, AZ 85034 - 2010 AZ $1,492,622
2 General Partnership Dallas, TX 75201 - 8001 MS $1,417,483
3 General Partnership Phoenix, AZ 85034 - 2010 AZ $1,405,848
4 General Partnership Phoenix, AZ 85037 - 5000 AZ $1,057,686
5 General Partnership Phoenix, AZ 85000 - AZ $1,029,049
6 General Partnership Tucson, AZ 85719 - 2966 AZ $934,159
7 General Partnership Phoenix, AZ 85018 - 3347 AZ,CA $885,159
8 General Partnership Fresno, CA 93704 - 2870 CA $871,000
9 General Partnership Fresno, CA 93790 - 9050 CA $852,387
10 General Partnership Phoenix, AZ 85012 - 2518 AZ $799,808
11 General Partnership Tucson, AZ 85705 - 1901 AZ $790,621
12 General Partnership Los Angeles, CA 90024 - 3319 CA $786,674
13 General Partnership Fresno, CA 93701 - 1921 CA $748,419
14 General Partnership Memphis, TN 38187 - 0339 MS,TN $737,175
15 General Partnership Memphis, TN 38139 - 5416 AR $715,846
16 General Partnership Phoenix, AZ 85037 - 4902 AZ $688,369
17 General Partnership Memphis, TN 38187 - 0339 MS $681,552
18 General Partnership Sacramento, CA 95864 - 4932 CA $635,843
19 General Partnership Tucson, AZ 85718 - 1515 AZ $604,661
20 General Partnership Houston, TX 77057 - 1306 TX $591,113
21 General Partnership Phoenix, AZ 85037 - 4201 AZ $567,911
22 General Partnership Omaha, NE 68137 - 0769 NE $564,318
23 General Partnership Phoenix, AZ 85021 - 4404 AZ $562,669
24 General Partnership Fresno, CA 93711 - 1057 CA $560,838
25 General Partnership Sacramento, CA 95836 - 9201 CA $545,064
26 General Partnership Sacramento, CA 95836 - 9202 CA $522,086
27 General Partnership Denver, CO 80206 - 4814 CO $509,667
28 General Partnership Sacramento, CA 95837 - 9102 CA $496,381
29 General Partnership Indianapolis, IN 46241 - 9514 IN $483,927
30 General Partnership Sacramento, CA 95841 - 4548 CA $479,883
31 General Partnership Fresno, CA 93711 - 1948 CA $466,649
32 General Partnership Fresno, CA 93711 - 1152 CA $463,586
33 Joint Venture Fresno, CA 93705 - 0225 CA $457,541
34 General Partnership Sacramento, CA 95831 - 2001 CA $455,903
35 General Partnership Memphis, TN 38116 - 1802 AR $453,181
36 General Partnership Dallas, TX 75205 - 2811 AR $452,744
37 General Partnership Fresno, CA 93704 - 3015 CA $449,442
38 General Partnership Memphis, TN 38139 - 5444 MS $431,583
39 Joint Venture San Antonio, TX 78211 - 9741 TX $422,941
40 General Partnership Phoenix, AZ 85021 - 7241 AZ $421,886
41 General Partnership Sacramento, CA 95831 - 4320 CA $414,085
42 General Partnership Fresno, CA 93725 - CA $409,419
43 General Partnership Phoenix, AZ 85021 - 5479 AZ $407,342
44 General Partnership Fresno, CA 93725 - 9673 CA $401,713
45 Joint Venture Memphis, TN 38120 - 4005 MS $400,061
46 General Partnership Phoenix, AZ 85043 - 9804 AZ $393,326
47 General Partnership Phoenix, AZ 85009 - 4085 AZ $390,103
48 General Partnership Virginia Beach, VA 23457 - 1365 NC,VA $386,232      
49 Joint Venture Houston, TX 77098 - 5105 TX $386,072      
50 General Partnership Fresno, CA 93711 - 1948 CA $381,867      
51 General Partnership Fresno, CA 93711 - 2750 CA $381,351      
52 General Partnership Sacramento, CA 95833 - 9749 CA $376,586      
53 General Partnership Phoenix, AZ 85016 - 3401 CO $374,448      
54 Joint Venture Fresno, CA 93711 - 7014 CA $373,614      
55 General Partnership Fresno, CA 93711 - 2342 CA $368,872      
56 General Partnership Fresno, CA 93711 - 3503 CA $368,292      
57 General Partnership Phoenix, AZ 85028 - 2129 AZ $362,150      
58 General Partnership Sacramento, CA 95820 - 2113 CA $361,405      
59 General Partnership Omaha, NE 68118 - 2502 NE $358,999      
60 General Partnership Fresno, CA 93711 - 2451 CA $355,158      
61 General Partnership Phoenix, AZ 85016 - 4200 AZ $352,859      
62 General Partnership Houston, TX 77040 - 9501 TX $342,188      
63 General Partnership Fresno, CA 93725 - CA $341,151      
64 Joint Venture San Francisco, CA 94115 - 1930 CA $339,784
65 General Partnership Sacramento, CA 95827 - 1405 CA $339,585
66 General Partnership San Francisco, CA 94122 - 1311 CA $335,923
67 General Partnership Omaha, NE 68106 - 3260 NE $335,723
68 General Partnership Fresno, CA 93704 - 2208 CA $332,781
69 General Partnership Fresno, CA 93706 - 9761 CA $331,234
70 General Partnership Fresno, CA 93771 - 1006 CA $328,174
71 General Partnership Phoenix, AZ 85004 - 1550 AZ $326,614
72 Limited Partnership Virginia Beach, VA 23457 - 1351 VA $310,636
73 Individual Chicago, IL 60614 - 5122 IL $309,597
74 Individual Houston, TX 77041 - 6520 TX $305,695
75 General Partnership Fresno, CA 93704 - 2208 CA $302,979
76 General Partnership Indianapolis, IN 46231 - 2728 IN $299,160
77 Corporation with Stockholders Memphis, TN 38101 - 0028 TN,AR $298,390
78 General Partnership Fresno, CA 93711 - 0579 CA $297,306
79 General Partnership Phoenix, AZ 85043 - 9804 AZ $294,080
80 General Partnership Memphis, TN 38117 - 2313 CA $292,289
81 General Partnership Memphis, TN 38117 - 4572 AR $289,722
82 Unknown Fresno, CA 93790 - 9050 CA $289,581
83 General Partnership Fresno, CA 93704 - 2208 CA $288,916
84 Corporation with Stockholders Indianapolis, IN 46204 - IN $288,750
85 Individual Virginia Beach, VA 23457 - 1126 VA $286,535
86 Individual New York, NY 10003 - 4314 NE $286,311
87 Corporation with Stockholders Cincinnati, OH 45246 - 4514 OH $283,588
88 Corporation with Stockholders Fresno, CA 93790 - 9050 CA $283,242
89 General Partnership Phoenix, AZ 85012 - 2518 AZ $282,292
90 Trust - Revocable Fresno, CA 93704 - 2208 CA $281,660
91 Corporation with Stockholders Fresno, CA 93706 - 9344 CA $280,794
92 General Partnership Houston, TX 77024 - 7420 TX $277,745
93 Corporation with Stockholders Sacramento, CA 95815 - 3838 CA $277,711
94 Corporation with Stockholders Dallas, TX 75206 - AR $276,266
95 Joint Venture Phoenix, AZ 85016 - 2827 AZ,CO,SD $275,958
96 Individual Sacramento, CA 95837 - 9801 CA $273,665
97 Individual Houston, TX 77257 - 1745 TX $273,093
98 General Partnership Omaha, NE 68128 - 5742 NE $272,494
99 Individual Fresno, CA 93711 - 1058 CA $272,245
100 Corporation with no Stockholders Kansas City, MO 64141 - 6038 MO $270,251

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.

Table 6: In 15 states, at least 10 percent of "Freedom to Farm" subsidies are expected to come from outside the state

State Estimated Freedom to Farm subsidies, 1996-2002 Estimated Freedom to Farm subsidies coming from outside the state Estimated percentage of Freedom to Farm subsidies coming from outside the state
California $1,347,994,818 $76,017,933 6%
Colorado $641,766,695 $69,014,120 11%
Arizona $333,479,777 $40,473,119 12%
Washington $648,656,148 $39,662,989 6%
Florida $76,158,738 $38,341,451 50%
Tennessee $330,332,937 $29,942,688 9%
New Mexico $141,082,919 $20,444,159 14%
Oregon $231,259,132 $17,607,270 8%
Virginia $106,621,746 $11,124,560 10%
Wyoming $49,061,883 $10,097,270 21%
Utah $47,284,530 $8,792,674 19%
Nevada $11,701,478 $7,763,278 66%
Maryland $70,820,122 $6,192,340 9%
Pennsylvania $111,161,468 $6,187,393 6%
New Jersey $20,714,746 $3,044,990 15%
Massachusetts $4,182,474 $2,907,418 70%
Connecticut $6,278,839 $2,758,589 44%
Arkansas $2,643,409 $2,198,094 83%
Delaware $16,094,115 $1,286,484 8%
West Virginia $10,977,347 $934,709 9%
Maine $4,246,607 $669,413 16%
New Hampshire $1,496,120 $443,622 30%
Rhode Island $323,012 $316,035 98%
Vermont $3,666,181 $274,846 7%

Source: Environmental Working Group. Compiled from USDA data.

Chapter 4.  Fox in the Henhouse:  "Freedom to Farm" Subsidies to the Farm Bureaucracy

Just a few years ago, Senators Dick Lugar (R-IN) and Pat Leahy (D-VT) were dumbfounded to learn that the U.S. Department of Agriculture had no idea how many employees it had. We're not sure if USDA ever nailed down the number, though it was thought to exceed 100,000.

Ironically, if "Freedom to Farm" becomes law, payments will be fixed, predictable, and require almost none of the legendary mountains of paperwork that farm subsidy recipients complain about so much. So, what will become of the vast, federally-paid staff and the farmer "county committees" that constitute the USDA bureaucracy at the local level?

It remains to be seen how many of them will lose their federally-paid jobs. But for some, at least, their own farm subsidies will keep rolling in.

Last year, EWG analyzed farm subsidy payments made to recipients who were identified in USDA payment files as officials in charge of administering farm subsidy programs at the local (county office) level. The results of our analysis were reported in our study, Fox in the Henhouse. We found that thousands of government employees who run Federal farm subsidy programs also participate in them -- big time. In all, we identified over 4,600 people -- more than one out of every five permanent county or state level employees listed in USDA's 1994 subsidy payment files -- who received farm subsidies totaling almost a quarter of a billion dollars ($243 million) between 1985 and 1994. We also found that, relative to the average recipient, those employees and USDA farmer committee members often participate more frequently in the very programs over which they exercise greatest local control. And they receive higher-than-average payments.

"Freedom To Farm" Subsidies to the Farm Bureaucracy

We estimated potential "Freedom to Farm" payments for which local USDA officials will be eligible, based on criteria in the legislation and the deficiency payments they received between 1990 and 1994.

Our analysis found that some 18,498 recipients in the USDA bureaucracy -- employees and former Committee members -- will be eligible for more than $785 million dollars over 7 years (Table 7). They will be eligible for an average of more than $42,000 -- almost $17,000 more than the average recipient (in percentage terms, recipients in the bureaucracy will get 65 percent more than the average.)

Here are our findings:

  • A total of 1,105 full-time employees paid through USDA at county offices across the country will be eligible to receive nearly $22 million in "Freedom to Farm Payments." We estimate that they'll be eligible for just under $20,000 each.
  • A total of 275 "county executive directors" -- the top officials in local USDA county offices -- will be eligible to receive $4.71 million in "Freedom to Farm" subsidy payments over the next 7 years -- over $17,000 each, on average.
  • We identified 1,814 part-time, permanent county employees who will be eligible to receive a total of $56.497 million in "Freedom to Farm" payments ($31,310 in subsidies each). Another 66 full-time, federally paid employees with "temporary" appointments will be eligible for at least $1.1 million in "Freedom to Farm" payments.
  • Enormous payments will be available to recipients who were members of USDA's "farmer committees" at the local level just last year. Altogether, 5,102 of those committee members will be eligible to receive $275.36 million, an average of $54,000 over 7 years. That is more than twice as much as the average recipient will be eligible for under "Freedom to Farm" ($25,798).
  • "Alternate" members of the committees, numbering 10,745, will be eligible for $443.16 million under "Freedom to Farm."
  • All totaled, potential "Freedom to Farm" payments to the farm bureaucracy over the next 7 years could total more than $785 million, paid to almost 18,500 recipients.

Table 7: USDA officials who run the subsidy program will be eligible to receive more than $785 million in "Freedom to Farm" subsidies

Type of USDA official Estimated Freedom to Farm subsidies, 1996-2002 Number of eligible recipients Estimated subsidies per recipient
Full-time, permanent county employees $21,926,790 1,105 $19,843
Part time, permanent county employees $56,796,669 1,814 $31,310
Full-time, temporary county employees $1,094,022 60 $18,234
County Executive Directors $4,710,206 275 $17,128
County Committee Members $275,359,726 5,102 $53,971
County Committee Alternates $443,160,273 10,745 $41,243
Total $785,532,374 18,498 $42,466

Source: Environmental Working Group. Compiled from USDA data.

 

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