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Freedom to Farm

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

February 1, 1996

Freedom to Farm: 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