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Happy subsidized Thanksgiving —Taxpayers pick up the tab on side dishes

By   /   November 19, 2012  /   1 Comment

By M.D. Kittle | Wisconsin Reporter

MADISON – Mmm! Mmm! You can almost smell that Thanksgiving feast cooking.

The breads. The scalloped corn. That funky green bean casserole with the French fried onions Great Aunt Beryl has been serving since the first Truman administration.

HAPPY THANKSGIVING: Here’s our annual look at subsidies paid by taxpayers for that spread coming to your table on Thursday.

And don’t forget the turkey, that 60-pound monster that could serve an army but will feed about 25 people you have very little contact with for much of the year.

Now stuff it all with millions upon millions of taxpayer dollars, and you’ve got yourself the traditional subsidized American feast.

Federal taxpayer subsidies underwrite the costs of production of some of the key commodities found on the Thanksgiving table. Not really the turkey or the pumpkin pie, but a lot of dishes in between the pre-feast relish trays and dessert.

The rolls, the long-grain rice stuffing, the creamed corn, the vegetarian turkey for the nonmeat-eating crowd — are among four of the five most heavily subsidized crops propped up by U.S. taxpayers.

Supporting role

Just five crops — corn, wheat, soybeans, rice and cotton — account for 90 percent of all farm subsidies. Since 1995, 10 percent of subsidized farms have raked in 75 percent of all subsidy payments, according to the 2012 Farm Subsidy Database from the Environmental Working Group, or EWG, a Washington, D.C.-based, nonprofit research organization.

Corn subsidies claimed the heftiest taxpayer supports in 2011, at north of $4.61 billion.

The soybean industry pocketed $2.073 billion, and wheat growers received $2.023 billion.

“It’s a very large amount of money and it benefits a relatively few select farmers because the subsidies are only going to a handful of crops and usually targeted to largest farming operations,” said David DeGennaro, legislative analyst at the Environmental Working Group. “The small family farmers we like to think about don’t generally receive very much from the government.”

In Wisconsin, some $6.65 billion in subsidies were paid to farmers and agriculture investors between 1995 and 2011, about $4.36 billion of that in commodity subsidies and another $1 billion in crop insurance offsets. Conservation subsidies topped $900,000 over the period, and another $352 million went to disaster relief.

Wisconsin ranked 15th among U.S. states in scoring ag subsidies. Its neighbor to the south, Iowa, ranked 2nd, with agricultural interests netting about $23.6 billion in subsidies between 1995 and 2011, the brunt of those, about $15.9 billion, paid to commodities.

Bob Oleson, executive director of the Wisconsin Corn Growers Association and a long-time family farmer in Palmyra, said much has changed in farming over the past generation, particularly the growing input costs and the way agriculture incentives work. For instance, direct payments, established as part of the 1996 federal Farm Bill as a temporary means to help transition farmers from taxpayer-subsidized agriculture, appear to be on their way out after more than a dozen years of extension.

Oleson and others in commodity production justifiably argue that subsidies are a drop in the bucket compared to the 80 percent of farm bill funding going to nutrition programs, such as food stamps.

He said farming still requires incentives to make sure the Unites States continues to have a safe and affordable food supply.

“We’ve gone from direct payments to other things. Farmers don’t look in the mailbox for checks anymore,” they look to the market, he said.

But the system still is generating some big checks for a relatively small number of corporate and large-scale farming operations.

Big winners

In Wisconsin, 10 percent of farmers or ag investors collected 64 percent of all federal subsidies between 1995 and 2011, according to the EWG data base. The top 10 averaged $19,290 in annual federal payouts, while the bottom 80 percent received an average $692 in subsidies.

The top recipients in Wisconsin last year included:

The top farm subsidy recipients nationally in 2011:

  • Dnrc Trust Land Management of Helena, Mont. – $710,791 ($52,412,501 from 1995 to 2011)
  • Ratio Farms of Helena, Ark. – $654,990 ($2,988,924 since 2009)
  • Balmoral Farming Partnership of Newellton, La. ($20,548,707 between 2002 and 2011)

Not one Wisconsin farm operation cracked the top 50 biggest subsidy recipients among nearly 960,000 subsidized agricultural interests.

DeGennaro said EWG doesn’t mean to single out agriculture as subsidy hogs. Plenty of industries are taking taxpayer dollars. The energy industry, for instance, received as much as $100 billion in subsidies in 2007, Doug Koplow of the energy-consulting firm Earth Track in Cambridge, Mass., told the Christian Science Monitor this year.

But in these austere days of fiscal cliffs and skyrocketing debt, DeGennaro said it doesn’t make sense to spend money where it isn’t needed. He contends the nation’s biggest corporate farmers, many picking up $1 million or more in subsidies don’t need taxpayer help.

No federal stuffing

A lot of other commodities aren’t getting the same kind of helping hand. Some of the biggest players on the Thanksgiving table — Wisconsin-grown cranberries and turkey, for instance — do without much help from the government.

Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association, said the industry receives support from the University of Wisconsin-Madison and the University of Wisconsin-Extension, but cranberry growers also provide funding to assist those research and product development initiatives.

But Wisconsin’s $350 million specialty cranberry industry doesn’t begrudge producers incentives to sustain U.S. and global consumer needs, Lochner said.

“What Congress and American society need to keep in mind is what the farm bill tries to do to make sure we have an adequate supply of food,” he said. “Sometimes we have to provide some subsidies or economic incentives so we have the safety we need so people can produce food.”

That safety comes with a growing share of taxpayer-funded risk carriage, like subsidized crop insurance, DeGennaro said. Extreme drought conditions over much of the U.S. this year could push crop damage recovery costs as high as $40 billion, some analysts estimate. That compares to a record $11 billion in indemnities paid out last year. U.S. taxpayers pick up the tab for about 62 percent of crop insurance costs, DeGennaro said.

And while the thanksgiving turkey, a supermarket loss leader, comes at a discount, the National Turkey Federation is warning consumers that higher livestock input costs, thanks to the ethanol boom, will hit the grocery bill hard moving forward.

“Even as the corn crop has grown significantly over the past decade or so, corn supplies have become much tighter,” said Joel Brandenberger, president National Turkey Federation.

And taxpayers will pick up the tab twice — once at the store and again on their federal tax bill.

Contact Kittle at mkittle@wisconsinreporter.com

— Edited by John Trump at jtrump@watchdog.org

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  • Hayseed

    Thank you for correctly pointing out that 80+ percent of the dollars in the “Farm Bill” goes to food stamps and other food programs. But I think saying most of the actual farm subsidies are “targeted” to large farms is misleading at best. Just like the highest 5 percent of income earners pay most of the income tax, farm subsidies based on the number of acres farmed go to (surprise!) the farmers who have the most acres. I am a 5th generation farmer, and according to the EWG database website in your article I am the #3 subsidy recipient for my zip code. The time period covered by the EWG numbers is a 12 year period that includes some very lean years in which the subsidies I received were the difference between meeting my expenses or losing money. 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.