Reaping harvest of federal funds

Data on subsidies offer misleading portrait of beneficiaries, farmers say

April 21, 2002|By Jean Marbella | Jean Marbella,SUN NATIONAL STAFF

YUBA CITY, Calif. -- His home? In a former walnut grove turned housing development. His childhood neighborhood, where he used to pedal between the bread-baking grandma and the pie-making grandma? A swath of disappearing peach orchards. That rise in the landscape that everyone calls Chicken Hill? A one-time chicken ranch turned into a housing development of 5-acre lots.

"This is what I don't want to see happen to the rice land," says Keith Davis. "I want it to remain farmland."

Davis, a rice farmer in northern California for more than three decades, will probably get that wish, even as calls are growing across the country to limit the government subsidies that have helped keep afloat the growers of commodity crops -- rice, corn, wheat -- as other farmers fall by the wayside.

Davis and his wife received almost $335,000 in subsidies last year, and he says it would be impossible to keep farming without such assistance.

The subsidies paid by the federal government loom as the central issue of the huge farm bill being thrashed out on Capitol Hill. Subsidies have jumped to staggering proportions recently -- $21 billion last year -- but they have rarely gathered widespread attention in a country where farmers make up just 2 percent of the population.

But in the past several months, subsidies have drawn the spotlight and unwanted notoriety largely because the Washington-based Environmental Working Group (EWG) published a database on the Internet revealing surprising information on who receives this federal largess and how much.

Multimillionaires such as Charles Schwab, of the investment firm bearing his name, NBA basketball player Scottie Pippen and even former Enron Chief Executive Kenneth L. Lay have received subsidies, the database showed, signaling just how far the measure has strayed from its origins as a Depression-era program to assist impoverished farmers through desperate times.

The database was compiled after the group successfully filed Freedom of Information Act requests for U.S. Department of Agriculture documents.

It shows that while subsidies are described as a means of keeping the small family farm going when the trend in agriculture favors larger agribusinesses, most of the payments go to the biggest growers: The top 10 percent of recipients receive nearly 70 percent of subsidies.

And 60 percent of farmers don't receive any subsidies at all because they do not grow the crops covered by the program.

"We need to close the loopholes so you don't see the large majority of funding going to the largest agribusinesses," says Susanne Fleek, EWG's director of governmental affairs, who says limiting the subsidies is a first step in correcting the imbalances of the subsidy program.

A bill passed by the Senate would limit the amount of subsidies a farmer can receive to $250,000, or $275,000 if married; the House agreed to accept that limit in a vote Thursday. Other points of the bill must be reconciled in a conference committee before the bill becomes law.

The new limits will save taxpayers $1.3 billion over the next decade, according to congressional budget analysts.

Fleek calls imposing limits "a start" but says, "You also need to look at the whole system of subsidies, and see how most farmers aren't even eligible for payments. Look at the drought now, in a state like Maryland: What is the safety net for those farmers?"

The EWG is particularly concerned that conservation programs -- in which farmers and others can receive benefits for preserving open spaces, protecting water quality and maintaining wildlife habitats -- do not lose out as they have in the past because money is instead shifted to pay for subsidies.

In California rice country, the Sacramento Valley north of the state's capital city, those who grow, mill and sell the grain say the EWG database offers a misleading portrait of the farm subsidy program.

Take, for example, the Farmers Rice Cooperative in Sacramento, which received $1.8 million from the USDA last year, making it the state's top subsidy recipient. But that single figure alone doesn't tell the whole story, says Bill Huffman, a spokesman for Farmers Rice.

"They give out the total, but they don't explain this is a co-op owned by 920 members," Huffman says. "They are family farmers, and they are the ones who are the beneficiaries."

The co-op operates two mills at the port of Sacramento that churn out tons of rice in various guises -- the premium Nishiki brand rice favored by sushi makers, rice milled to Kellogg's preferences for Rice Krispies, rice polished down to the endosperm for sake makers, broken rice grains that go into Nestle's Crunch bars or baby food, to name just a few.

Farmers say it would be impossible in today's climate to stay in business without subsidies -- it simply costs more to produce rice than farmers are paid for it after harvest.

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