New York Times | January 22, 2002 | By ELIZABETH BECKER
STUTTGART, Ark. - From a distance, the rice capital of America resembles a small metropolis; its grain elevators and processing mills rise from the delta plains like so many skyscrapers plunked in the middle of unending rice fields.
Up close, however, this town of 10,420 people gives an entirely different impression.
Smack up against two of the United States' biggest rice processing businesses lie neighborhoods of rundown houses and shanties. In the surrounding countryside, decaying towns like Altheimer offer evidence that the area's smaller rice farmers are going out of business at one of the fastest rates in the country.
This region, whose farmers have helped make the United States the world's third-largest rice exporter behind Thailand and Vietnam, offers one of the starkest examples of the unintended consequences of the federal farm subsidy program.
The area ranks near the bottom in the nation for health and economic indicators like infant mortality, housing starts, bank deposits and nutrition.
But in a recently published ranking of who gets the most money from subsidies, recipients in this part of Arkansas captured three of the top five spots in the country.
Riceland Foods, here in Stuttgart, is No. 1, with $49 million over five years. Tyler Farms, in nearby Helena, is No. 4, with $23.8 million. And Producers Rice Mill, also of Stuttgart, is No. 5, with $19.8 million.
Overproduction of rice, fed by subsidies like the $19.8 million received by Producers Rice Mill, has led to lower prices for farmers. A truck prepared to unload rice at the company in Stuttgart, Ark.
Joel Henderson, a rice farmer in Wright, says the slumping price has forced him to use up his savings. "It's a buyer's market for the grain companies," said Mr. Henderson, who breeds horses for extra income.
That adds up to $92.6 million, the largest concentration of crop subsidies in the country.
But the subsidies have been lopsided. The top 1 percent of farmers and farm groups in the federally defined Mississippi Delta region receive 26 percent of the subsidies, or $1.9 billion. The bottom 80 percent receive only 9 percent, or $686 million, says the Environmental Working Group, which amassed the data through a Freedom of Information request. The group used its Web site, www.ewg.org, to make public every federal subsidy paid to every farmer from 1996 to 2000.
"We're worse off than Appalachia," said Kevin Smith, who represents this district in the Arkansas Senate and heads a commission to revive the area's economy. "Sometimes I think everyone here either gets a welfare check or a farm subsidy."
The once-gracious river town of Helena shows the effects of the demise of the small family farmer. All the public schools are boarded up. On tree-lined streets, elegant restored houses are flanked by abandoned ones.
"This is what happens when a town loses its middle class," said John D. Crow, who operates a bed and breakfast in Helena.
Senator Blanche Lincoln, who comes from this area, argued in a recent speech that federal farm policy was harming rural America.
"It is not only our farmers who are suffering as a result of failed government policy," Ms. Lincoln said. "The institutions of small-town and rural America - local banks and merchants, feed and supply stores, equipment dealers, even corner groceries and family-owned hardware stores - are all caught in the web of financial collapse."
Yet Ms. Lincoln, a Democrat, led other Southern lawmakers in blocking a proposal last year to limit the money a farmer can receive through subsidies.
When Congress returns next week and debates a new, $171 billion farm bill, lawmakers may take up the proposal again, but this time under new scrutiny because of the publicity brought by the Web site.
Nearly every problem of the federal farm program is magnified in Stuttgart and its environs.
Overproduction, fueled by the subsidies, has pushed crop prices below the levels of more than a decade ago, even while the cost of farming has skyrocketed.
Black farmers have inadvertently been penalized under subsidy formulas, because the formulas are based on 1985 farm production. At that time, they did not produce as much as white farmers, but after winning a lawsuit, they got help that allowed them to use more modern technology and increase their production. They want their subsidies increased to reflect their higher output.
Perhaps most striking is the pace of consolidation of big farms - what a state official referred to as the "plantation effect."
Because large farmers receive the largest subsidies, they are buying out smaller farmers, leading to what the Agriculture Department calls a "rapid decline" of family farms under 100 acres and the rise of old- fashioned tenant farming. Over three-fourths of rice farms are worked by tenants or part-owners, the department says.
The declining price for rice has threatened farmers like Joel Henderson, who lives in a house surrounded by pecan trees on the bank of the Arkansas River in Wright. Once prosperous but now burdened with more debt than he wants to carry, Mr. Henderson is easing out of rice farming on his 1,400-acre spread.
"It's a buyer's market for the grain companies," Mr. Henderson said. "I had the best crop in years but I lost all my savings because the price for rice is so low."
For black farmers, the publication of subsidy payments helps support their claim that the Agriculture Department has frozen old inequities into farm payments.
Representative Mike Ross, Democrat of Arkansas, recently told a group of black farmers in Pine Bluff that he agreed with them. He showed them a letter he wrote to President Bush asking him to add enough money to this year's budget to increase subsidies based on updated production figures and thereby erase the difference between payments for white and black farmers.
Larry Raspberry, a Jefferson County farmer, thanked Mr. Ross and said, "Those smaller rates have been choking the black farmers to death."
In other parts of the delta, small farmers have already lost their land and are now tenant farmers.
Tyler Farms, which received the fourth-biggest subsidy in the country, is made up of tenant farmers who work on a 60,000-acre spread owned by David Brooks Griffin and his father, Mr. Griffin said.
"I don't farm," he said. "I just own the land." He declined to discuss the distribution of the subsidies.
For their part, Riceland and Producers argue that the size of those subsidies is deceptive.
These private companies are cooperatives that buy rice from farmer members who sign over some of their farm payments to the companies in a complicated system that then allows the cooperative to process and sell the rice on the wholesale and retail markets.
Profits are supposed to be returned to the farmer in higher rice payments after covering costs and salaries. But many years, the farmers receive no better price from the cooperatives than they do from private brokers.
Even though Riceland had $750 million in sales last year, some farmer members, including Mr. Henderson, refused to sell to the co-op, saying they could make more money using a private broker.New York Times:
