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Happy subsidized Thanksgiving: Taxpayers pay twice for annual feast

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STUFFED: U.S. taxpayers have spent hundreds of billions of dollars over the past two decades propping up growers and producers of the food that ends up on their Thanksgiving table.

 

By M.D. Kittle | Wisconsin Reporter

MADISON, Wis. — It’s Thanksgiving. Time to strap on the feedbag, bring out the stretchy pants.

This may not be pretty, but it’s going to be good.

Our annual bacchanalia of butter-slathered potatoes, artery-clogging stuffing, assorted casseroles of bad decisions, dinner rolls, cranberry relish, pies and the piece de resistance, the centerpiece of overeating, the turkey.

There will be pounds.

Know who else is getting fat on your Thanksgiving feast?  The heavily subsidized crop growers and livestock producers who have taken in billions of taxpayer dollars over the past two decades.

Federal taxpayer subsidies underwrite the cost of production of some of the key commodities found on the Thanksgiving table.

The rolls, the long-grain rice stuffing, the creamed corn, the vegetarian turkey for the nonmeat-eating crowd — are made from four of the five most heavily subsidized crops propped up by U.S. taxpayers. But the people who bring you your turkey, cranberries and pumpkin pie have picked up their share of your tax dollars through the government’s ever-growing crop insurance program.

Just five crops — corn, wheat, soybeans, rice and cotton — account for more than 80 percent of all farm subsidies.

Between 1995 and 2012, the federal government handed out $292.5 billion in subsidies, according to the 2013 Farm Subsidy Database from the Environmental Working Group, a Washington, D.C.-based, nonprofit research organization.

Over the period, taxpayers chipped in:

  • $177.6 billion in commodity subsidies
  • $53.6 billion in crop insurance subsidies.
  • $38.9 billion in conservation subsidies.
  • $22.5 billion in disaster subsidies.

Corn leads all comers in the cash chase, at north of $84.42 billion over the past 18 years. Last year, U.S. corn growers picked up $2.7 billion in subsidies.

“Corn is king when it comes to farm subsidy relief,” said Alex Formuzis, vice president of communications for EWG.

Only a fraction of financial assistance goes to the production of corn for the dinner table. The brunt of the U.S. crop, in an era of record bushels and record prices, goes into ethanol production — highly subsidized — and livestock feed.

Bob Oleson, executive director of the Wisconsin Corn Growers Association and a long-time family farmer in Palmyra, has argued that subsidies are a drop in the bucket compared to the 80 percent of federal farm bill funding going to nutrition programs, such as food stamps.

He told Wisconsin Reporter last year that farming still requires incentives to make sure the Unites States continues to have a safe and affordable food supply.

You’ll hear the same argument from the Wisconsin State Cranberry Growers Association.

“We need to make sure as a country and a society that we have an abundant supply of high quality food,” said Tom Lochner, executive director of the organization. “There are benefits to the (subsidy) program.”

Mainly, taxpayer-funded subsidies help keep the price of food down for the consumer, Lochner said. The American Farm Bureau estimates the average cost of this year’s Thanksgiving feast for 10 will cost $49.04, down 44 cents from last year. That’s a bargain and certainly something to be thankful for, Lochner said.

Wisconsin cranberry growers have benefited from taxpayer blessings over the year. While specialty crops don’t receive direct subsidies like corn, wheat and the other top commodities do, the growers take their share of crop insurance help.

In 2012, there were about 32,000 acres of cranberries insured in the federal crop insurance program nationally, 17,000 of those acres in Wisconsin, according to data from the USDA’s Risk Management Agency. In Wisconsin, taxpayers picked up about $1.2 million in insurance premium subsidies for cranberry growers, the lion’s share of the $2 million paid out nationally.

Wisconsin’s cranberry industry generates about $350 million annually in economic impact, according to the association.

Another staple of the Thanksgiving table, potatoes, is grown with the assistance of the taxpayer. In Wisconsin last year, nearly 46,000 acres of potatoes were insured through $6.2 million in premiums, $3.9 million of that picked up by the federal government.

Crop insurance subsidies have exploded in recent years, becoming the biggest share of the taxpayer’s bill. Direct subsidy payments run about $5 billion per year. Federal projections peg crop insurance subsidies at about $9 billion.

“Under current law, taxpayers pay two-thirds of crop insurance premiums and most claims filed when disaster strikes,” said Scott Faber, Environmental Working Group’s vice president for government affairs. “This policy has made crop insurance the most expensive — and least equitable — component of the farm safety net, costing taxpayers twice as much as direct payments and other subsidies.”

The matter of crop insurance subsidies is becoming more pressing, according to Craig Cox, EWG’s senior vice president for agriculture and natural resources.

“Assuming we ever get a farm bill done,” Cox said, “the direction the bill is taking in the House and the Senate is ending the majority of traditional farm subsidies and essentially replacing that with enhanced crop insurance.”

To the left-leaning EWG, a vocal critic of the push to cut the federal Supplemental Nutrition Assistance Program, the bigger problem is that the brunt of taxpayer-funded subsidies are going to a small group of large-scale farmers.

USDA data show 10 percent of producers have collected 75 percent of all subsidies, amounting to $178.5 billion over the past 18 years, while 62 percent of farms didn’t collect subsidy payments.

A commenter on a Wisconsin Reporter story last year took issue with the notion that most of the actual farm subsidies are “targeted” to large farms. The commenter, who claims to be a fifth generation farmer and one of the largest recipients of subsidies according to EWG, said there are a lot of ups and downs in farming.

“The time period covered by the EWG numbers is a … period that includes some very lean years in which the subsidies I received were the difference between meeting my expenses or losing money,” the farmer wrote. “I agree with Bob Oleson that the current market has reduced the need for direct subsidies, and that given the budget problems in Washington, may have to be reduced or eliminated.

“I only hope that government subsidies to other industries that have outlived their intended purposes will also be reduced or eliminated in an effort to reduce total government spending.”

Contact M.D. Kittle at mkittle@watchdog.org

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M.D. Kittle