An analysis of payments to large agribusiness operations, big city residents, and the USDA bureaucracy
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|
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
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.
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.
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|
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
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).
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|
|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%|
|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%|
|West Virginia||$10,416,759||41||25||$ 113,464||27%|
|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|
|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.
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|
|San Diego, CA||$3,375,828||530||6|
|San Antonio, TX||$9,902,010||1,400||10|
|San Jose, CA||$2,048,526||294||11|
|San Francisco, CA||$6,483,474||268||14|
|El Paso, TX||$2,402,524||322||22|
|New Orleans, LA||$2,235,862||235||24|
|Fort Worth, TX||$9,494,035||1,304||28|
|Oklahoma City, OK||$14,924,024||2,330||29|
|Kansas City, MO||$11,153,387||1,787||31|
|Long Beach, CA||$1,431,371||201||32|
|Saint Louis, MO||$10,172,170||1,641||34|
|Virginia Beach, VA||$4,794,163||209||37|
|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|
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|
Source: Environmental Working Group. Compiled from USDA data.