EWG Reveals Who Benefits Most from Direct Subsidy-Laden Farm Bill

rainbow farm

Image courtesy of Hellsgeriatric via flickr

It's not often we find ourselves agreeing with President Bush's viewpoint but, in the case of the subsidy-larded farm bill, we'll make an exception. As Ken Cook, president of the Environmental Working Group, notes in his always informative blog, Bush is -- for once -- right on the money with this issue. Here's what he had to say about it at a recent Rose Garden appearance:

"The bill Congress is now considering would fail to eliminate subsidy payments to multimillionaire farmers. America's farm economy is thriving. The value of farmland is skyrocketing. And this is the right time to reform our nation's farm policies by reducing unnecessary subsidies."Now there are those of us who tend to disagree with him on most issues -- particularly those relevant to energy policy and the environment -- but there's no arguing here about the sheer folly of subsidizing rich farmers and large agribusinesses. With commodity prices surging in recent months, it's becoming harder than ever to justify shoveling gobs of taxpayer money to such a highly profitable sector.

There are, of course, all those unnecessary corn, cotton and sugar subsidies we've railed about in the past; the most egregious provision of the bill, however, is the huge amount of "direct payment" crop subsidies it funnels to a small number of extremely wealthy recipients. In 2007, they added up to a whopping $5 billion. According to EWG, that number could balloon to well over $26 billion over the next 5 years if Congress approves an extension of the provision.

Reporting for the Politico, David Rogers provides a solid overview of the current impasse over the bill between the president and Congress. Here are a few choice sections:

"By contrast, at a time of high commodity prices and food shortages, the government continues to distribute about $5.2 billion in annual direct payments to individuals regardless of personal income or current production on their farmland.

. . .

Mindful of the inequities, the White House is proposing to cut off subsidies to anyone with an adjusted gross income — after deductions — of $500,000 or more. House-Senate negotiators have moved toward this goal in the case of non-farmers, but a plan outlined Wednesday doesn't begin to phase out direct payments to active farmers until their adjusted gross incomes exceed $950,000.

Even then, the phaseout is so slow that a producer could have an income of almost $1.95 million before all direct payments would be cut off.

. . .

The administration argues that with only limited constraints on subsidy payments today, a substantial portion go to large, high-income producers. In 2005, commercial farms, defined as operations with sales of $250,000 or more, accounted for 9 percent of all farms but received 54 percent of all government payments, averaging $54,100 per farm.

These same farms, according to White House estimates, had average household incomes of $200,000. And the $500,000 ceiling now proposed by the administration is in fact a compromise from the president's original plan to cut off commodity subsidies to any farmer with an adjusted gross income above $200,000.

Those affected account for a relatively small group when considered as a percentage of U.S. taxpayers. Internal Revenue Service data for recent years suggests that almost 98 percent of all American tax filers have an AGI of less than $200,000; only 0.5 percent have an AGI of more than $500,000."

The Democratic-led Congress should be ashamed of itself for trying to pawn this atrocious bill off as meaningful "reform". You know a bill has some serious problems if the president and his administration's arguments are making good sense. As usual, EWG has done a great job of bringing this issue to the fore and has even provided a helpful database containing the top recipients of direct payments in 2007 (in addition to a lot of other helpful resources).

The following video shows just how ridiculous the farm bill's direct payments system is by pointing out that many of its wealthiest beneficiaries live in San Francisco, Los Angeles, Washington, D.C. and other major metropolitan areas -- not exactly the rugged "rural" communities you would think they should help.

Via ::Mulch: Farm Bill: 2007 Direct Payment Recipients (blog)

See also: ::In the Farm Bill, a "Factory Farm Incentive Program", ::U.S. House Farm Bill Draft Supports Subsidizing Sugar for Ethanol Production