U.S. Farm Subsidies by Recipient

FARGO - May 31/02 - SNS -- Andrew Swenson, a Farm Management Specialist with the North Dakota State University Extension Service, says a website operated by the Environment Working Group Web site (http://www.ewg.org) has been the focus of much media attention.

The website allows individuals to find out how much money individual farms received from the U.S. farm program. Swenson's article follows:

It has also raised many questions. Is the information misleading, and does publication of the subsidy amounts infringe on the rights of the recipients? If the information is credible, does it help discern whether farm policy helps family farms and rural communities, and how the public is served by funding individual farm recipients?

The Web site states one thing: government subsidies per recipient. It states no more and no less. Many farm groups, concerned about public reaction from the EWG Web site, claimed that the Web site is misleading because it does not provide the full financial position of producers and have defended large payments to recipients with the rationale that large farms have more expenses and deserve or need more government support.

There are no claims made, or implied, by the database about the profitability of producers or the financial risks associated with farming. It would not be possible for EWG to provide full income and costs by farm subsidy recipient because that is not public information. However, the information in the database should be accurate because it is the assemblage of computerized records of checks written by USDA to recipients.

A point of confusion for users of the database is that the "recipient" of a farm subsidy payment may be an individual, a corporation, a general partnership or some other legal entity. Therefore, when the recipient is not an individual, it may represent the combined subsidies of several people. For example, several farm families could be in a partnership or corporation which is one "recipient" of government subsidies. This means that each farm family actually receives only part of the total listed for the "recipient." However, the opposite situation can also occur. One farm family can receive subsidies through several "recipients." Both spouses in a farm household can be individual recipients of subsidies, and because of the "three entity rule" each spouse can also be part of two other legal farm "entities." One farm couple could be receiving subsidies through six "recipients" on the Web site.

It is understandable that some producers feel having part of their financial information displayed on the Web site is an invasion of privacy. But it is funding provided by the public through federal policy. In that sense, to be against the EWG Web site is to be against open government. However, the glare of public scrutiny falls on farmers when farm landlords and agri-businesses such as input suppliers and processors also benefit directly or indirectly from the subsidies.

The reason that EWG publicized the database is provided by statements on its Web site, which expresses their goal of more government "support in the farm sector for conservation reserve programs, wetland reserve and important conservation programs" and their opinion that the "…current farm policy has badly failed almost everyone in agriculture but the largest producers of a few favored crops."

The database probably raised more public awareness about the distribution of farm subsidy payments and the total level of subsidies than awareness of conservation programs. However, in the new farm bill, large farm interests, particularly cotton and rice farmers, blocked all efforts to close loopholes for payment limitations, such as the three-entity rule and the definition of a farmer. Also, the total payment limitation amount per entity was raised 57 percent compared to the 1996 farm bill because of the addition of another type of subsidy in the new farm bill. The bill did include a provision that excludes individuals who averaged more than $2.5 million of adjusted gross income over three years from being eligible for farm subsidy payments.

A lasting impact of the EWG Web site may be the heightened interest of the public on farm policy, especially when federal budgets are tight. Currently, a federal deficit of more than $100 billion is projected for 2002, there is no mention of a social security "lockbox," and the government grapples with the difficult decisions of how to provide for national defense, education, health care, etc. Negative media coverage of the new farm bill is both cause and a symptom of public discontent with farm policy.

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