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Taxpayer feast: Thanksgiving side dishes heavily subsidized

By   /   November 23, 2011  /   No Comments

By M.D. Kittle | Wisconsin Reporter
MADISON — Enjoy that Thanksgiving feast, taxpayers. Chances are, you’re going to pay for part of it twice.
Federal taxpayer subsidies underwrite the costs in the production of some of the key commodities found on the traditional Thanksgiving table.

The side dishes on the menu — the rolls and stuffing, the scalloped or cream-style corn, and the long-grain rice — all come from the five crops that remain heavily subsidized by U.S. taxpayers.
Commodity kings
Wheat, corn, soybeans, rice and cotton make up more than 90 percent of agriculture subsidies to farmers or investors, many of whom are drawing big checks in urban centers far from the fields of harvest.
More than 800,000 farmers and landowners nationwide receive subsidies, but the payments are tilted heavily toward the largest producers, according to the 2011 Farm Subsidy Database from the Environmental Working Group, or EWG, a research nonprofit in Washington, D.C.
The group has tracked U.S. Department of Agriculture subsidy payments and provided the information online since 2004.
The USDA annually distributes between $10 billion and $30 billion in cash subsidies to farmers and farmland owners. Payments are based on complex schemes that go back to the Great Depression, based on market prices, disaster payments and myriad factors.
Beyond cash subsidies, the agency provides subsidized crop insurance, marketing support and other services, and performs extensive agricultural research.
“These indirect subsidies and services cost taxpayers about $5 billion each year, putting total farm support at between $15 billion and $35 billion annually,” the report states.
EWG’s latest review shows subsidy payments totaled $261.9 billion between 1995 and 2010, $167.3 billion of that underwriting direct cash commodity payments. Crop insurance subsidies hit $39.2 billion during that period, and conservation payments and disaster assistance topped $55.5 billion combined.
In Wisconsin, USDA paid out $6.3 billion in subsidies between 1995 and 2010. The brunt of that funding, $4.26 billion, went to commodities.
The Badger State ranked 15th overall in subsidy checks.
Neighboring Iowa, comparatively, ranked second overall during that period, with farmers collecting $22.3 billion in subsidies.
‘Whipping boy’
There has been a lot of talk lately about doing away with the decades-old commodity subsidies, particularly as Congress’ so-called supercommittee explored ways to slice $1.2 trillion from the federal deficit.
Casey Langan, spokesman for the Wisconsin Farm Bureau Federation, cautioned that agricultural subsidies represent a drop in a very big bucket of the federal budget, and most of the multi-year farm bill pays for policy beyond the barn.
“The farm bill really should be called the food bill,” he said, noting that upwards of 70 percent of the funding goes toward nutrition programs that provide food assistance, particularly for those in need.
Part of the subsidy pie includes the Conservation Reserve Program, designed to set aside environmentally fragile land.
“The subsidies that people talk about have kind of become the whipping boy for those who want to reduce spending, but they are a small part,” Langan said.
Calls to the National Corn Growers Association were not immediately returned. The association lobbies for the interests of corn growers nationwide.
Subsidy cuts seem to be in the crosshairs in these austere budget times, especially now that the supercommittee failed to agree on a deficit-reduction plan and, in the process, walked away from a closed-door 2012 Farm Bill deal that would have guaranteed support for the grain and cotton industries.
Langan said most farmers don’t want to count on subsidies for their livelihoods.
“Farmers want to produce for the market; they don’t want to farm for a government check,” he said.
Market-driven agriculture
Wisconsin’s vibrant cranberry industry isn’t sweating the threat of diminished subsidies.
“We don’t have them, and we’ve never have had them,” said Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association, which advocates for 160 grower members, representing about 85 percent of cranberry production in Wisconsin. “We’re part of about 50 percent of agriculture that focuses on market, not on the government checks.”
Wisconsin cranberry farmers do rely on taxpayer support for research assistance. This year, about $1 million was programmed for genetic improvement research, conducted at University of Wisconsin-Madison and other institutions, Lochner said. Another approximately $300,000 is pegged for conservation programs.
Wisconsin’s $350 million cranberry industry has boosted markets for the specialty crop, Lochner said, through marketing innovation and cooperative campaigns.
“Rather than take subsidies from the government, we would like to see the government invest in things like research,” he said. “We see a better return for our growers.”
While corn and grain prices have hit record prices, taxpayers continue to subsidize growers, while livestock producers and most fruit and vegetable producers do not receive subsidies or minimal supports.
But turkey producers, who don’t receive direct federal subsidies, aren’t clucking – or gobbling – about the ingrained system.
“We’re not an industry that relies on subsidies,” said Sherrie Rosenblatt, spokeswoman for the National Turkey Federation. “We’re proud to be part of the Thanksgiving table, and happy that 46 million people will eat turkey on Thanksgiving.”
The turkey industry has voiced concerns about subsidies for corn-based ethanol, which have driven up a critical input cost for producers.

“We need to make sure there is adequate seed supply. Seventy percent of the cost to produce a turkey is seed,” Rosenblatt said.

Government support checks are being delivered well outside the farm. The USDA in 2010 sent $394 million in farm subsidy payments to residents of U.S. cities with populations of 100,000 or more, according to EWG.
During the past 16 years, 458 recipients in Madison collected a combined $1.47 million in subsidy payments, the EWG report notes. In Milwaukee, 213 recipients shared $589,505, and 243 Green Bay area residents received a total of $667,540.
Lochner said subsidies do more harm than help, historically driving prices down. But he said society often underestimates the value of the American farmer, and the work that goes into producing a ready, affordable food supply.
“I don’t think people understand how important it is to have food because it has always been available here,” he said. “One billion people in the world will go to bed hungry tonight, and the population is expected to double in the next 30 to 40 years. We’re going to have to figure out a way to feed them.”

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