Iowa ranks No. 2 in total agricultural subsidies, but a growing number of farmers question where the money is going
During a time of increasing federal budget deficits and anger over governmental spending, one of the top conversations stretching across both the rural and urban United States is the issue of farm subsidies. But for a growing number of Iowa farmers, it’s not a matter of whether or not the federal government should continue to shell out billions of dollars in subsidies, but more importantly, who should receive the funds?
United States farm subsidies are government payments given to farmers and agribusinesses to supplement their income and manage the supply and pricing of specific commodities. President Roosevelt created farming subsidies during the 1930s to help struggling family farms during the Great Depression.
“Farming subsidies were put into place to help farmers in areas that they can’t necessarily control,” said Don Carr, senior communications and policy advisor for the Environmental Working Group (EWG), an environmental research and advocacy in the areas of toxic chemicals, agricultural subsidies, public lands and corporate accountability. “But over the years, they have been co-oped by larger farmers and corporations. Our data shows that the largest farms in America have pulled in more than 70 percent of the money — and that’s not a good thing.”
The U.S. Department of Agriculture (USDA) distributes between $10 billion and $30 billion in cash subsidies to farmers and farmland owners each year. Each amount given depends on crop prices, the level of disaster payments and other factors. The more land you own, the more financial aid is available. According to the EWG, more than $15.4 billion in U.S. farm subsidies were given out last year. Approximately 61 percent of the aid went to 10 percent of the recipients with an annual average payment of $48,000.
“Farming subsidies have always been based on volume of production,” said Dr. William Edwards, a professor at Iowa State University. “The more acres a farmer is working, the larger financial risk he is taking and the more money he will receive. People need to look at it as how much per acre, not how much per farmer. Still, I believe ‘how much do we pay’ is a legitimate question.”
Ken Cook and Richard Wiles founded the EWG (www.ewg.org/farm) in 1993 “to use the power of public information to protect public health and the environment.” Since 1995, the non-profit organization has tracked $245.2 billion in farm payments. The farm subsidy database went online in 2004, showing that a majority of taxpayer subsidies are going to the wealthiest and largest farm operations in the country.
“These are our tax dollars at work — that’s why we created the website,” Carr said. “We want others to know where the money is going.”
Iowa currently ranks No. 2 out of 50 states in subsidy totals with $20,940,915,308 from 1995 to 2009. Texas sits atop the list, receiving $22,822,940,805 in subsidies. Illinois ($17,568,234,640), Minnesota ($14,346,020,958) and Nebraska ($13,958,371,387) round out the top five.
Just alone in 2009, Iowa totaled $1,161,474,362 in subsidies, right behind top-spot Texas at $1,474,373,975. Illinois ($936,952,338), Kansas ($883,018,738) and Minnesota ($877,636,121) followed.
Cook’s national summary analysis indicates that Iowa has collected $20.9 billion in subsidies from 1995 to 2009, with 19 percent of farmers not collecting any subsidy payments and 10 percent of farmers collecting 57 percent, amounting to $10.6 billion over 15 years. The report also shows that the top 10 percent received an average of $31,450 per year between 1995 and 2009. The bottom 80 percent received $1,517 per year between 1995 and 2009.
“Our goal is to have transparency in government and in farm payments,” Carr said. “It’s obvious by the percentages that the smaller farms aren’t seeing the money.”
Subsidy programs give farmers extra money for their crops and guarantee a price floor — a limit on how low a price can be charged for a product. Top national programs are corn, wheat, cotton, conservation reserve programs, and soybean subsidies. In 2009, corn received the most subsidies, almost $4 billion. In Iowa, the top five ranking subsidies in order are corn, soybean, conservative reserve program, disaster, and dairy. Environmental quality incentive program, livestock, wheat, wetlands reserve program and oat subsidies finish the top 10 programs.
Where’s the money?
According to the EWG, counties in Iowa that received the most in subsidies in 2009 were Kossuth County ($23,242,735), Fayette County ($19,667,312), Sioux County ($18,807,288), Winneshiek County ($17,836) and Delaware County ($17,814,011). Polk County ranks No. 94 in Iowa’s 99 counties with $6,512,879. Kossuth County is also nationally recognized, landing at No. 29 among top counties in the United States that received subsidies from 1995 to 2009. Total subsidies for Kossuth County, which is the largest county in Iowa with an area of 974 square miles, were $452,866,319. Fresno County in California is No. 1, pulling in $961,304,454 since 1995.
Since 1995, H&J Buseman Farms in Belmond has received $3,993,776 in corn and soybean subsidies, outpacing Kruger Farms Inc., in Dike by $143,199. Over the past 15 years, H&J Buseman Farms has received an average of $266, 251. The business received the most money in 2000 with $480,846.
Locally, Polk County has received $134 million in subsidies from 1995-2009. The top 10 percent collected 70 percent of all subsidies, amounting to $82.1 million over 15 years. The bottom 80 percent received an average of $585 per year between 1995 and 2009.
In 2009, the top recipient of farm subsidies in Polk County was Longnecker Farms Inc. Located in Cambridge, the business totaled $43,184 in corn, soybean, wheat and oat subsidies in 2009. Since 1995, Longnecker Farms Inc. has received $1,225,489 in subsidies. Sandridge Farms Co., in Carlisle collected $41,986 in corn, soybean, wheat, sorghum and oat subsidies in 2009, and $1,255,751, the most in Polk County, since 1995.
Nationally, Cook’s summary analysis from 1995 to 2009 found that 62 percent of farmers in the United States did not collect subsidy payments, 10 percent collected 74 percent of all subsidies, amounting to $156.2 billion over 15 years. The top 10 percent received an average of $29,675 per year between 1995 and 2009, and the bottom 80 percent earned an average of $579. Riceland Food Inc., a marketing service for rice, soybeans and wheat, has received $554,343,039 in subsidies since 1995. Located in Stuttgart, Ark., Riceland is the world’s largest marketer of rice, reaching across the nation and to more than 75 foreign destinations.
Upcoming Farm Bill
One of the major legislative pieces that will greatly impact the farming community is the upcoming 2012 Farm Bill. The current bill known as the Food, Conservation, and Energy Act of 2008, will expire on Sept. 30. The Farm bill is a comprehensive bill passed approximately every five years by the United States Congress and designs the funding structure for commodity programs, agricultural research, nutritional programs, conservation programs, rural development and more. The writing of the new bill will begin in 2011.
The Obama administration wants to save billions of dollars by putting new limits on farm subsidies and cut back on government support for crop-insurance companies, according to the 2011 fiscal year budget proposal. Right now, farmers are excluded from subsidies if their non-farm-related adjusted gross income is more than $500,000 or their farm-related adjusted gross income is more than $750,000. The Obama administration wants to lower that income to $250,000. The proposal would make sure that no farmer would receive more than $30,000 a year in subsidies, down from the current $40,000.
Sen. Charles Grassley (R-New Hartford), an Iowa farmer since his childhood, says he wants to protect small farmers. In March 2009, Grassley introduced a $250,000 farm payment cap to the Senate Budget Committee, but the amendment failed by vote of 10-13.
“Despite efforts in the last farm bill, we continue to have a system where 10 percent of the farmers get 73 percent of the benefits,” Grassley said. “We have to set a hard cap, a hard level of payments that is equitable to all producers, no matter their size.”
This past August, Grassley, along with Sen. Russ Feingold of Wisconsin, again took a stand on farming subsidies. The proposal would set a limit of $250,000 for farm payments in an attempt to better target farm program payments to family farmers. It is estimated the legislation would save the federal treasury more than $1 billion over 10 years.
“A hard cap will allow young people to get into farming and will help restore public respectability for federal farm support by targeting the assistance to those who need it,” Grassley said.
The Iowa Farm Bureau Federation (IFBF) is also taking a stance on farming subsidies, specifically direct payments. In early September, delegates from Iowa’s 99 counties met in West Des Moines and ended their support of federal direct payments to farmers, opting rather for more money to be used for a sound revenue insurance program, risk management and fair trade.
According to the EWG, national direct payments amount to approximately $5 billion annually. The recommendation will got the American Farm Bureau Federation’s annual meeting in Atlanta in January and play a major role in the creation of the 2012 Farm Bill.
“I think there will be a lively debate in Atlanta,” said David Miller, IFBF director of research. “I think the debate will show the political realities of agricultural spending within the context of large federal deficits that lie ahead. As times change, is there a better way or a better policy for management than the current structure? Iowa has taken a stance, but I’m not so sure about other parts of the nation. We’ll just have to wait and see.” CV
Iowa Top Recipients 2009
Recipient Location Total USDA Subsidies 2009
1. Sonstegard Family Farms Montevideo, Minn. 56265 $312,556
2. Premier Grain Ptr Walker, Iowa 52352 $279,068
3. Bruhn Farms Joint Venture Mapleton, Iowa 51034 $269,313
4. Gabeline Family Farms Yarmouth, Iowa 52660 $264,065
5. Mbs Family Farms Plainfield, Iowa 50666 $191,679
6. AjM Farms Duncombe, Iowa 50532 $171,793
7. I-80 Farms Newton, Iowa 50208 $170,684
8. David Frank Weymiller New Albin, Iowa, 52160 $168,510
9. Burco Farms Partnership Independence, Iowa, 50644 $165,035
10. H&J Buseman Farms Belmond, Iowa $162,085
Iowa Summary Information
• $20.9 billion in subsidies (1995-2009)
• Iowa ranks No. 2 of 50 states
• 19 percent of farmers in Iowa did not collect subsidy payments according to the USDA
• 10 percent collected 57 percent of all subsidies
• Amounting to $10.6 billion over 15 years
• Top 10 percent received an average of $31,450 per year between 1995 and 2009
• Bottom 80 percent received an average of $1,517 per year between 1995 and 2009
Top programs in Iowa, 1995-2009
Program Number of recipients Subsidy Total
1. Corn subsidies 173,524 $13,701,505,019
2. Soybean subsidies 128,295 $3,582,130,582
3. Conservation Reserve Program 95,333 $2,866,921,399
4. Disaster Payments 57,810 $282,606,774
5. Dairy Program Subsidies 6,667 $155,982,584
Top Iowa counties total USDA Subsidies 2009
County Total USDA Subsidies
1. Kossuth $23,242,735
2. Fayette $19,667,312
3. Sioux $18,807,288
4. Winneshiek $17,836,730
5. Delaware $17,814,011
51. Story $11,656,010
70. Dallas $8,654,820
94. Polk $6,512,879
Source: EWG Farm Subsidy Database
Dallas County, Iowa Summary Information
• $195 million in subsidies
• Ten percent collected 65 percent of all subsidies
• Amounting to $111 million over 15 years
• Top 10 percent received an average of $25,299 per year between 1995 and 2009
• Bottom 80 percent received an average of $838 per year between 1995 and 2009
Polk County, Iowa Summary Information
• $134 million in subsidies
• Ten percent collected 70 percent of all subsidies
• Amounting to $82.1 million over 15 years
• Top 10 percent received an average of $21,976 per year between 1995 and 2009
• Bottom 80 percent received an average of $585 per year between 1995 and 2009
Top Polk County recipients, 2009
Recipient Location Total USDA Subsidies
1. Longnecker Farms Inc. Cambridge 50046 $43,184
2. Sandridge Farms Co. Carlisle 50047 $41,986
3. Michael S. Christianson Granger 50109 $40,000
4. Bill Barnes Inc. Bondurant 50035 $39,583
5. Steven W. Holland Alleman 50007 $39,570
Story County, Iowa Summary Information
• $238 million in subsidies
• Ten percent collected 61 percent of all subsidies
• Amounting to $125 million over 15 years
• Top 10 percent received an average of $27,504 per year between 1995 and 2009
• Bottom 80 percent received an average of $1,186 per year between 1995 and 2009
Top Dallas County recipients, 2009
Recipient Location Total USDA Subsidies
1. Menz Farm Perry $64,271
2. Brelsford Family Farms Perry $61,098
3. Timothy A. Forret Adel $40,524
4. C. Edward Shafer Grimes $40,000
5. Robert D. Manning Granger $40,000
Top Warren County recipients, 2009
Recipient Location Total USDA Subsidies
1. Allan R. Armbrecht Colo $127,794
2. Flynn Bros Ptnsp Nevada $59,020
3. Sandve Farms Inc. Marshalltown $52,033
4. Ledet Farms LLC Huxley $51,940
5. Iowa State University Ames $48,100
Source: EWG Farm Subsidy Database