Almost Two-Thirds of U.S. Farm Aid Goes to 10% of Recipients, Group Says

U.S. farm subsidies topped $15.4 billion last year, according to the Environmental Working Group, which says the payments are too costly and more of the funds should be used to promote green agricultural practices.

About 61 percent of the aid went to 10 percent of recipients, with average annual payments approaching $48,000, the EWG said in an update of its federal farm-subsidies database. In all, assistance was distributed to more than 1.27 million individuals or entities, the Washington-based group said in a report.

The study, released today, comes as lawmakers begin hearings on a new farm bill that would reauthorize U.S. agriculture-subsidy programs when the present legislation expires in 2013. Some farm-payment provisions reduce raw- material costs for companies including Archer Daniels Midland Co. and Bunge Ltd. by encouraging production, while others advance environmental goals by rewarding greener land use.

“We need to start this debate with a clear-eyed look at what taxpayers are spending,” said Craig Cox, the head of agricultural programs for Environmental Working Group. “Our farm policy has drifted far from its original purpose” of helping smaller farmers, he said.

Growers of corn, the biggest U.S. crop, with a 2009 value of $48.6 billion, received the most subsidies, almost $4 billion. Cotton, the fifth-most valuable crop, was subsidized to the amount of $2.27 billion, followed by wheat, at $2.23 billion. Wheat is the fourth-biggest crop, behind soybeans and hay.

$245.2 Billion

Farm subsidies have cost taxpayers more than $245.2 billion since 1995, when the Environmental Working Group began tracking payments, according to its data.

The 2009 update covers almost all crop, disaster, conservation and crop-insurance payments for individuals and cooperatives receiving aid. It does not break down payments passed to individuals through cooperatives or for properties enrolled in conservation programs, nor does it include figures from some smaller conservation programs.

Working with fuller data, Environmental Working group estimates payments for 2008 at $17 billion.

Peanut Growers

The American Peanut Marketing Association of Blakely, Georgia, was the nation’s top recipient of federal aid in 2009, receiving nearly $4 million, according to the report. Jason Knox, the manager of the association, which handles payments to about 3,000 producers, said the subsidies work they way they’re supposed to.

“It puts a floor under the farmer, so the banks know he can pay off his loan,” he said. Without the payments, growers would have more difficulty getting credit to finance their operations, he said.

U.S. farm-payment programs may come under more scrutiny as the debate over the next farm law begins because of record budget deficits, Cox said. Still, major changes are difficult because of the makeup of the congressional agriculture committees, which are dominated by heavily subsidized districts.

The 15 congressional districts receiving the most in payments accounted for about a quarter of all farm aid, according to the database. Representatives from nine of those districts serve on the House Agriculture Committee, including the panel’s top Democrat and Republican. There are 435 congressional districts.

The EWG’s research is “sensational but shoddy,” said Democratic Representative Earl Pomeroy, the only House member from North Dakota, whose constituents last year received nearly $421.9 million in farm subsidies, the most of any district in the country.

“The family farmers I represent have their extraordinary financial risks offset somewhat by a farm program that helps when production fails or when prices collapse,” said Pomeroy, who serves on the agriculture panel.

The Environmental Working Group’s report is based on government data compiled through public records and federal Freedom of Information Act requests.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net.

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