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Daniel Krotz

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Small Farms and the Farm Subsidies Scandal

Posted: 02/ 3/11 02:02 PM ET

Republicans have dialed back their election promise to cut $100 billion dollars in spending down to what looks like $40 billion dollars, give or take a billion or two. I think everyone -- Independents, Republicans and Democrats alike -- can agree that a $60 billion dollar miss isn't even close enough for government work.

Social Security and Medicare are the obvious places to make meaningful cuts. But Republicans say that cutting Social Security and Medicare programs is the responsibility of the Democrats. Not surprisingly, Democrats say the opposite, but the two parties are surprisingly and uncharacteristically civil toward one another as they discuss cuts to these entrenched programs. "After you, my dear Alphonse!" say Republicans. "No after you, Gaston!" say Democrats.

The two parties' civility extends to debate about cutting subsidies for Welfare Queens like ConAgra, Archer Daniels Midland, and that friend of the family farm, Monsanto.

Republicans as a whole are aligned with corn state Democrats like Ben Nelson and Tom Harkin in gentlemanly bi-partisan agreement to provide British Petroleum an estimated $600 million in ethanol subsidies in 2011. Further evidence of bi-partisanship is seen in how Nelson and Harkin are collaborating with Republicans Chuck Grassley and John Thune to provide, says the conservative Cato Institute, $30 of taxpayer subsidy to Archer Daniels Midland for every $1 dollar of profits it makes on ethanol.

According to the Wall Street Journal, between 2005 and 2008, taxpayers provided fossil fuel producers--oil, coal, and gas companies--$72.5 billion dollars in subsidies and tax breaks. During the same period taxpayers subsidized "alternative" fuel producers to the tune of $29 billion dollars--$16 billon of that for ethanol. And while fossil fuel producers had record profits in 2009 and 2010 and with corn prices expected to be over $6 a bushel in 2011, the Republican Party and corn state Democrats still can't see their way to cut the deficit by ending these welfare programs.

These legislators tell us that jobs will result from these subsidies, but they can't and won't tell us how many jobs, where the jobs will be located, or whether or not these "good" jobs will be living wage jobs. What consumers are already seeing are higher gas prices and lower gas mileage, and more expensive processed and fresh food at supermarkets--by 8%, according to the Congressional Budget Office. Since consumers are getting the shaft, who's getting the benefits?

Between 1995-2009, taxpayers shelled out $246.7 billion dollars in subsidies. Sixty-two percent (62%) of American farmers received no subsidy at all. These no-subsidy farmers and ranchers are primarily small operators grossing under $250,000 a year on their farms. In other words, these are family farmers that fit the idea most Americans have of farmers.

Nationally, ten percent (10%) of farmers received 74% of all subsidies, or $183.25 billion of the total $246.7 billion allotted. The bottom eighty percent (80%) of farmers who received a subsidy got on average, $572.00 dollars (not millions or billions--dollars)

My home state of Arkansas is in the top ten for receiving subsidies. Between 1995 and 2009, Arkansas received $9.60 billion dollars in subsidies, almost all of it to rice conglomerates located in the central and eastern part of the state. How much did "small family farms" receive?

Carroll County, Arkansas, where I live up in the Ozarks, received $8.22 million dollars in subsidies between 1995-2008. Seventy-seven percent (77%) of Carroll County farmers received nothing. Ten percent (10%) received half the money, or $4.11 million dollars, while the bottom 80% averaged $250 annually.

The real story about farming in Carroll County is that nearly all farms and ranches are genuine family operations, yet these families get almost no government support while a half dozen corporations down south get billions.

Comparing national, state, and local subsidy distribution rates shows similar breakouts: roughly 75% of farmers get nothing, roughly 10% of corporate farms get 75% of the money, and a few small to midsize farmers get some pocket change.

A final statistic summarizes the extent of the subsidy scandal: 8,000 cotton farmers received $3 billion dollars in subsidies in 2010. Ninety-eight thousand (98,000) fruit and vegetable farmers received $196 million dollars in subsidies in 2010.

Since small farms and the "small businesses" so treasured by Democrats and Republicans alike are actually getting almost no money from USDA and Energy Department subsidies they won't miss them when they're gone. So, if we total the $72 billion in fossil fuel subsidies and tax breaks and the $29 billion for "alternative" fuels we get to the $100 billion that Republicans promised during the last campaign--and no harm, no foul to America's small farmers.

We know that Republicans and Democrats are not going to cut Social Security or Medicare programs because they're afraid of the people. But the only thing they have to lose if they cut subsidies and tax breaks to wealthy energy and agribusiness corporations is campaign contributions.

We know they don't have the guts to cut Social Security and Medicare, but can they at least stop subsidizing their rich pals?

 
 
 
 
 
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04:28 PM on 02/09/2011
"We know they don't have the guts to cut Social Security and Medicare, but can they at least stop subsidizing their rich pals? "

Sadly, the answer to this will be no.
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mlaiuppa
Pres. Sarcasm Society. Like we need your approval.
03:27 AM on 02/08/2011
Why are corporations getting subsidies and small family farms getting nothing? Isn't this the opposite of the original intent of farm subsidies?
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HUFFPOST SUPER USER
Ozark Homesteader
http://ozarkhomesteader.wordpress.com
11:18 PM on 02/06/2011
As a fellow Arkansan, I agree completely with your assessment. The fact that most subsidies go to something other than food is disturbing. We have been delighted to find resources like Conway Locally Grown ( http://ozarkhomesteader.wordpress.com/2011/01/23/whole-wheat-oatmeal-bread/ ) and the other statewide efforts by Cody and Andrea at Falling Sky Farm. It's frustrating, though, that these folks who produce real food get so little support from the feds for their efforts.

I don't want my tax dollars to go to the corporations that are destroying our environment. Unfortunately, it looks like the current administration was as thoroughly bought by Monsanto and friends as the last several have been. It is extremely disappointing.
HUFFPOST SUPER USER
Ozark Homesteader
http://ozarkhomesteader.wordpress.com
11:31 PM on 02/06/2011
Oops--wrong link. Here's the right one, on a local farmers' network: http://ozarkhomesteader.wordpress.com/2009/11/27/locally-grown-market-networks-a-wonderful-variation-on-csas/
08:29 PM on 02/06/2011
Nothing like someone posting a lot of numbers without understanding the numbers. The biggest problem is the definition of a farmer. A farmer is someone with $3000 in gross sales of ag products if my memory is right. I could be off by a thousand dollars. To have a reasonable income, a farmer would need sales of $100,000 or more, probably closer to $250,000 just to get a $30,000 a year income.
04:31 PM on 02/04/2011
The historic reason we have farm subsidies is to help maintain a slight surplus of commodities. If you look at the news stories of the last few months crop failures around the world and rising food prices, you will see that American farmers are in a fairly good position to help buffer the world demand for food. Our exports of soybean and grain are one of the few bright spots in the export-import balance. With high grain prices, most "subsidies" are those going to boost the use of ethanol. that is still an emerging market, and it is one that is getting more effiecient and moving away from grain and toward fiber (residue) production as new technology is able to come on line.
04:11 PM on 02/04/2011
Contrary to the author's claims, small family farms do receive subsidies in the form of agricultural specific tax breaks. These are substantial and should be included in an honest full cost accounting. That said , these tax breaks and incentives are important and justifiable from a policy perspective.
iwrite2
If I were DNA Helicase I could unzip your Genes
11:17 AM on 02/04/2011
I am a small farmer, and I hate subsidies..get rid of the DOA and let me compete on a global scale and a local scale. If I cant make it I shouldnt be in business..besides all this damn propping is making the ground so expensive I cant buy any more to be a larger farmer...
07:52 PM on 02/05/2011
I will agree ground it too expensive, but I don't think subsidies have much to do with it. Outside money wanting a good investment has much more to do with sky high land prices.
11:12 AM on 02/04/2011
For every dollar of rice sold, the federal government gives the farmer $1.
For every dollar of cotton sold, the federal government gives the farmer 40 cents.
The federal government gives virtually no money to livestock farmers.
Those are the extreme cases.
HUFFPOST SUPER USER
ejfreeman
10:25 AM on 02/04/2011
They would rather talk about abortion, gays, and immagration than give up Tax breaks for oil cos.
farmers wall st. and tax breaks for sending our jobs out of country. How long is America going to keep
falling for these diversons ?
09:32 AM on 02/04/2011
This information should be shouted from the highest hills, ad infinitum, until these Republican-voting "conservative" small farmers finally get the message that they've been voting for the wrong party all these decades!!!!!!
09:08 AM on 02/04/2011
"Between 1995-2009, taxpayers shelled out $246.7 billion dollars in subsidies. Sixty-two percent (62%) of American farmers received no subsidy at all."

To read further analysis -- like above that was conducted by the Environmental Working Group, go to:

http://farm.ewg.org/region?fips=00000®name=UnitedStatesFarmSubsidySummary
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ErnestineBass
No longer a cog in The Machine.
11:05 AM on 02/04/2011
Daniel Krotz was somewhat remiss in his failure to post the ewg link. Thank you for doing so.

For those who want to "follow the money", the ewg site is an invaluable tool.
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HazelPethigFan
I don't know until I know
07:56 AM on 02/05/2011
As usual, you leave out the nuance. Do your readers know that EWG actually supports some of those programs listed on your link?

You have stated to me before that you support #4 on the list (CRP). Many of us reading do know the nuance. We can and will call you on it. Many of us can take the extra time to read nuance and understand it. Why don't you do it?

At least you are not going around making comments about the "evil" 2008 farm bill when the left actually supported 75% of the bill's costs (75% was for nutrition programs and conservation).
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ArchbishopBenevolent
Pre-Approved Saint, Beatific but not Canonical
09:02 AM on 02/04/2011
Quarter of a TRILLION dollars. This is corporate welfare!
abetterplace
Capitalistic reverand
08:05 AM on 02/04/2011
Since less than 3% of our population are farmers, I would guess that less than 3% of people reading this article know anything about farm subsidies other than the government is giving away our tax money to farmers or farmer corps for nothing. Mr Krotz got a small portion of his article correct, but what he didn't write is essential in understanding this program. It is too involved for the time and space here, but to put it in a nutshell, we do have a program that, like the health bill, needs an overhaul. There are many corporate entities receiving subsidies that should not. Notice I did not say "corporate farms" because very many family farms are actually now corporate farms.
They were forced to become corporate to both protect themselves from the maniac law suits this country produces and to be able to take full advantage of the farm subsidies. That's right, "the farm subsidies" which have evolved over the years to be more corporate friendly than family friendly.
In short, there are very few family farms left in this country and most all of them have "other job" income as most of their economic life. In siding with the author, this bill needs tearing down and rebuilding and I think tax payers could save a lot of money, while the farmers that actually need the subsidies could still get them.
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02:47 AM on 02/06/2011
Yes, many family farms are structured as corporations or LLC's because of the lawsuit threat. Our place is an LLC for that very reason.

Here's one aspect of the subsidy system that should be a simple fix, but nothing is ever simple when a lot of well funded lobbies are lurking around.
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/01/AR2006070100962.html
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Carl Caroli
I just don't understand people
07:45 AM on 02/04/2011
We need to stop all subsidies and tax breaks to big firms. Enough!