The Des Moines Register / January 13, 2000, Thursday
A few farmers or operations received the lion's share of federal money.
By GEORGE ANTHAN / Register's Washington Bureau
Washington, D.C. -- A large chunk of the federal farm subsidies in Iowa from 1996 to 1998 ended up in relatively few hands, according to a new study that raises more questions about the 1996 Freedom to Farm Act.
Almost half of the federal farm subsidies in Iowa over that period -- about $900 million -- went to just 10 percent of the total recipients, according to the Environmental Working Group, which studied payment patterns in Iowa.
Seventeen farmers or farm-related entities received an average of $322,000 over the three-year period, according to the group's analysis.
At the other end of the scale, the bottom 10 percent of Iowa's 118,000 farm subsidy recipients received an average of just $200 over the three years.
"That's hardly enough to buy two sacks of seed corn," said Kenneth Cook, who heads the Environmental Working Group. The self-described public interest organization examined payments under the Freedom to Farm Act and under two federal price-support programs. The analysis did not include conservation and disaster payments.
The study comes as Freedom to Farm takes a central role in the presidential caucus campaigns. Democrats Bill Bradley and Al Gore both called the GOP-led effort a failure at their first Iowa debate Saturday, pointing fingers at each other for allowing it to become law.
The GOP candidates are expected to take up the matter at their debate Saturday, although they have generally supported the law. They blame the Clinton administration for failing to open up foreign markets as U.S. farm policy moved toward a more market-oriented approach.
The study is based on information from the U.S. Department of Agriculture's records center at Kansas City, Mo., under a Freedom of Information Act request.
Cook said the Environmental Working Group's initial analysis covered payments to Iowa recipients only, although national statistics will be developed later. He said that names of top subsidy recipients were included in the material but that his organization would not release them until further verification involving individual checks issued by the USDA. He did say that the leading recipient of subsidies in Iowa over the three years received more than $630,000.
Freedom to Farm subsidies were designed to help farmers with the transition to the new policy ending government production controls.
"The level of concentration these figures show reflects what people see and feel: that there is this incredible level of consolidation in row-crop operations," said Neil Hamilton, director of the Drake University Agricultural Law Center in Des Moines.
"It means that even though farm programs have various forms of payment limits to maintain some connection with family farmers, the most recent versions (of farm programs) have continued to find ways to get around the limits," he said.
Cook said the study shows "that the vast majority of Iowa recipients have been left behind by Freedom to Farm. You have this incredible inequity where the majority of Iowa producers really are getting financially meaningless amounts of aid.
"It is insulting to suggest that this is a farm aid program that is making a lot of difference to a lot of Iowa farmers. While at the lower end you have farmers who could not have bought a sack of corn seed with their USDA checks, you have at the upper end most of the money going out with no link to financial need. Did anyone ask them, 'Do you need it?'"
The organization's examination finds that Iowans, including farm operators and landowners, received $441 million in 1996, $646 million in 1997 and $929 million in 1998 from the programs included in the records received from the USDA.
A total of 118,000 persons, corporations, partnerships and public institutions involved in Iowa agriculture received the checks over the three-year period.
Federal farm subsidies long have been tied to production, with the largest producers getting the most money. This pattern continued under Freedom to Farm, in which fixed annual payments were geared to the production-related subsidies of previous farm programs.
Iowa State University economist Michael Duffy said the analysis "is indicative of the kind of farm program that supports commodities, not people. This just kind of quantifies what we already assumed."
"This is why we need to kind of back up and ask, 'What is the real purpose of our farm programs?'" Duffy added. "Do we support commodities or people?"
John Whitaker, a Hillsboro farmer and Van Buren County supervisor, said family farmers "obviously aren't necessarily getting the benefit out of these programs."
Whitaker, president of the Iowa Farmers Union, a farm advocacy group, supports a plan by former Iowa Democratic Congressman Neal Smith to utilize price-support mechanisms and a strategic food reserve as the chief federal farm program.
Under this setup, benefits would be limited "to only a certain number of bushels," Whitaker said. "Those who are bigger then could live with the world market."
The Environmental Working Group analysis of the first three years of Freedom to Farm in Iowa divides the payments into 29 categories, ranging from zero to annual subsidies of $100,000 or more.
The largest single category contained the 13,000 producers who received payments ranging from $3,000 to $4,000 a year. A total of 10,220 recipients were paid from $1,000 to $1,500.
The study shows that the top 1 percent of recipients received 9 percent of the money, or $175 million.
Agriculture Secretary Dan Glickman said Monday that the Clinton administration would seek "significant changes" in farm programs this year.
The administration is fashioning a return to countercyclical farm programs that would be tied to commodity prices and agricultural income.
5 largest sums
While the Environmental Working Group did not release names, it did release the amounts received by the five largest recipients of federal subsidy money in Iowa between 1996 and 1998 from Freedom to Farm and two other federal programs:
* $ 631,151 * $ 411,632 * $ 388,745 * $ 349,928 * $ 339,336
Copyright 2000 The Des Moines Register, Inc.:
