Farm bill sends taxpayer subsidies to wealthy
A movie star is more likely than a cowboy to stroll down Beverly Hills’ famed Rodeo Drive, but that doesn’t mean there are no farmers in Tinseltown.
Or at least Congress thinks so, judging by the farm bill, which sent $15,488 in farm subsidies last year to the homes of Hollywood’s elite.
“Farmers” in Aspen, Colorado, got $278,000, while the fertile plots of New York City were fertilized with $2.8 million, according to a study from OpenTheBooks.
Congress is back at the drawing board, writing an update to the farm bill though budget watchdogs say there is little chance that lawmakers will rein in the kinds of policies that shelled out $13.2 billion last year, with much of that going to “crop insurance” subsidies.
Top recipients get checks for millions of dollars, with almost 400 farmers hitting the $1 million mark. Pinicon Farms in Iowa topped the list by collecting $9.9 million, followed by the Heard Family Farm in Georgia with $8.9 million and the Harder Farms Partnership in Minnesota with $8.7 million.
At least those are areas Americans usually associate with farming. Not so for hundreds of millions of dollars that flow to urban areas including Chicago, New York and Washington. In 2017 alone, almost $5 million went to people living in America’s wealthiest ZIP codes, OpenTheBooks says.
A dozen members of Congress also end up getting cash from the legislation, the study found.
All of it amounts to a distorted and privileged market maintained by taxpayers, analysts and scholars say.
“Farmers are a protected class in America, and they have a strong voting bloc behind them,” said former Sen. Tom Coburn, an Oklahoma Republican who worked closely on farm bills. “It’s a matter of everyone involved doing what’s best for their careers, but not what’s best for taxpayers.”
Mr. Coburn now regards the problem from outside the Beltway, as the honorary chairman of OpenTheBooks, a nonprofit group dedicated to publicizing federal spending.
“The farm bill may be the clearest example of how special interests can trump the public’s interest,” said Adam Andrzejewski, OpenTheBooks’ founder and CEO. “Both the recipients and the funders have a vested interest in not disrupting the flow of subsidies that generates income and political donations. Transparency is so critical because the public can’t reform a process it can’t see.”
The farm bill gets less attention from a national press more focused on White House scandals and hot-button social issues, but it is heavily covered and debated in agricultural communities.
These communities constitute a coveted voting bloc, said Vincent Smith, a conservative scholar at Montana State University who has published extensively on agricultural issues with the American Enterprise Institute. In Montana, for example, the agriculture bloc represents 20,000 to 30,000 voters out of fewer than 450,000, he said.
“With that vote tied to the farms, you can see that it’s relatively significant,” Mr. Smith said. “It’s a vote you want, and what holds for Montana is even more so for North Dakota, Kansas, Minnesota and others.”
When you compare those calculations with the fact that the Farm Bill ultimately comes to less than $20 billion in a federal budget of more than $3 trillion, “it’s clear that’s a pretty cheap way to buy votes,” Mr. Smith said.
Then there is the issue of who gets the money. The farm bill does not simply offer help to mom and pop farms, of which there are fewer, but instead often helps guarantee a profit for the bigger players in the agriculture game and insurers, analysts said.
“We could have a sensible safety net for those who actually depend on farming for their livelihood, and who through no fault of their own, such as drought or floods, are facing big losses,” said Craig Cox, senior vice president for agriculture and natural resources at the Environmental Working Group, a longtime critic of farm spending.
“But if all we wanted was to help those whose financial stability may be threatened going forward, we could do that for billions less if we eliminated the distortions,” he said.
In theory, that should be simple, given that only some 10 percent of households rely exclusively on farms for their income, Mr. Cox said, and those people “are doing really well.”
Among the distortions are things like a fixed price per acre that favors big farmers, the definitions of who exactly qualifies for subsidies, and subsidized premiums on “crop insurance” that prop up an artificial market for insurers.
Mr. Cox and Mr. Smith approach agriculture policy from different sides of the political spectrum yet find themselves unlikely allies in trying to reform the farm bill.
On crop insurance, Mr. Smith notes premiums are swollen well past market level by federal help, which doubled back in 2000, while Mr. Cox argued that the program should be scrapped and turned over entirely to the private sector, which was “trying to develop some innovative policies” before the federal giveaway made them uncompetitive.
Also driving up costs are other threads in the bill, such as requirements on food aid that stipulate that it must be American-sourced and delivered worldwide on U.S.-flagged vessels, analysts noted.
Now, on top of the farm bill, the Trump administration is proposing billions of dollars more in assistance to farmers who may find their export businesses diminished in response to the Trump administration’s tariffs. That reeks of crony capitalism, Mr. Coburn said.
“What about every other American business getting hit in all that?” he said.
Farmers argue that they need the help in the face of the new headwinds.
“This comes on top of nearly five years of falling commodity prices that have led to lower revenues and higher debt levels for farmers and ranchers,” said American Farm Bureau Federation President Zippy Duvall. “Nationwide, income is at a 12-year low, so any assistance that may help farmers is greatly appreciated.”
In addition, the Farm Bureau disputes Mr. Cox’s contention that the small fraction of households completely dependent on farm revenue is thriving.
“We lost more than 150,000 farms to consolidation and financial failure in the U.S. during the decade that ended in 2017,” Mr. Duvall said.
Lawmakers on both sides of the aisle are sympathetic, saying the critical sector of the American economy would struggle without federal supports.
It’s not clear when a final farm bill will emerge from a House-Senate conference.
Some of those familiar with the deal-making said a final vote seems unlikely before the midterm elections in November.
But troubling signs already have emerged. Sen. Chuck Grassley, an Iowa Republican who sits on the Agriculture Committee and describes himself as a “family farmer,” trumpeted his efforts to tighten the definitions of who is eligible to receive subsidies in the 2018 bill, and thereby make it something closer to what Mr. Cox described.
“I believe that farm programs should provide temporary, limited assistance to farmers when there’s a natural disaster or an unforeseeable, sudden change in market prices, not unlimited subsidies,” the senator says.
But Mr. Grassley’s amendment was stripped from the House version of the bill, and it’s unclear whether it will be included in the final version, Mr. Andrzejewski said.
Mr. Grassley is one of 33 members of Congress who raked in $15.3 million in farm subsidies from 1995 to 2016, according to data compiled by the Environmental Working Group. OpenTheBooks found 12 Congress members getting checks last year.
Mr. Grassley’s $9,329 subsidy ranked him in the middle of the list. His subsidy check is sent not to Iowa, but to his condominium in Arlington, Virginia, the report noted.
The top congressional recipient was Rep. Doug LaMalfa, a California Republican who has received $1.27 million in farm subsidies since 2015, and $637,059 in 2017 alone, OpenTheBooks reports. Rep. David G. Valadao, California Republican, took in $50,613 and Sen. Jon Tester, Montana Democrat, received $29,955.
Mr. LaMalfa, a millionaire, is a member of the House Agriculture Committee who has averaged some $87,000 in annual subsidies across two decades. Mr. Valadao is, along with his brothers, a part owner of a dairy farm in California that closed this year after failing to repay some $8.3 million in loans, according to local reports.
Mr. Coburn said it was unconscionable for lawmakers to get such handouts and that he believes it violates congressional ethics for members who set and approve departmental budgets to also get paid through them.
“I brought this up to the ethics committee when I was in Congress, and they just laughed at me,” he said.