Largest farms and firms get subsidies

Published November 30, 2004, Joy Powell, Star Tribune, Most of the nation's $16.4 billion in U.S. farm subsidies went to the biggest and most profitable farms and agribusinesses -- including Minnetonka-based Cargill Inc., according to new data released Monday by a watchdog organization.

In Minnesota, corn subsidies topped the list, totaling more than $260 million to 51,547 recipients last year. That's twice the amount of soybean subsidies paid in the state, according to the Environmental Working Group, or, a nonprofit organization in Washington, D.C.

Minnesota was the sixth-largest recipient of farm subsidies in 2003, dropping from fifth place the year before.

A total of 80,231 recipients, including absentee landowners, collected nearly $781.7 million in 2003 payments to Minnesota producers, said Ken Cook, president of the Environmental Working Group.

His organization also released such data in 2002, causing controversy while, some say, helping to shape the farm policy debate into one focusing on equity. The new data show that once again the top 10 percent of producers received most of the subsidies, Cook said.

"It's all tied to one simple thing -- how much qualifying land do you own, and how much is grown on that qualifying land," Cook said. "The more you've got, and the higher the yield on that land that's registered with the local USDA office, the more money you get."

Topping the list of Minnesota farm recipients is Oberg Farms Partnership, a family corporation based in Moorhead. Last year, the Obergs collected $646,205 as Ernie and his four sons farmed one of the biggest spreads in Minnesota's Red River Valley -- more than 10,000 acres of wheat, corn, soybeans, barley and oats.

Ernie Oberg could not be immediately reached for comment Monday evening. In a 2001 interview, he noted that five families are supported by the farm corporation, which also incurs big expenses and, from time to time, losses due to bad weather, crop disease and pests.

From 1995 through 2003, the Obergs collected nearly $4.58 million under various programs as one of the state's leading food producers. They're among the 3 percent of U.S. farmers who account for about half the nation's food production.

Paul DeBriyn, president of AgStar Financial Services, said numbers in the subsidy database can easily be twisted by critics of farm policy. It only makes sense, he said, that larger volumes of production draw more support.

U.S. consumers should keep in mind that they continue to enjoy some of the lowest food costs, relative to disposable income, of people in any country, DeBriyn said.

"The American public has got it pretty darn good. We've got the safest, cheapest, highest-quality food in the world," he said.

It's a question, the banker said, of how U.S. consumers want to pay for it.

Riceland tops list

Cargill Inc., the nation's largest agricultural company, collected millions in subsidies from 1995 to 2003, including cotton subsidies, which have been challenged by Brazil.

Cargill's turkey business alone was the sixth-largest recipient for 2003, collecting $6.7 million for insurance compensation for losses by avian influenza, or bird flu, Cook said.

Pilgrim's Pride of Virginia also received $11.4 million for that program. Overall, Arkansas-based Riceland Foods, the world's largest miller and marketer of rice, topped the list of companies receiving subsidies with $68.9 million taken in last year.

Nationwide, the $16.4 billion that taxpayers spent in 2003 represents a 27 percent increase over 2002. Surges in disaster payments and commodity subsidies drove the increase, Cook said.

As Congress begins scrutinizing policy for the 2007 farm bill, Cook hopes his database and analysis will help open the debate, he said. He and DeBriyn said issues of equity, conservation and risk management will be central to the discussions.

Taxpayers have spent more than $131 billion on federal farm programs over the past nine years, Cook said. He and other critics contend that taxpayers are subsidizing mostly large operations that overproduce corn, wheat, soybeans, rice and cotton. The result, they say, is low crop prices.

Only 33 percent of the nation's farmers received subsidies. And of those, 10 percent collected 72 percent of all money that taxpayers provided for conservation, commodity and disaster programs over the past nine years, Cook said.

Barry Flinchbaugh, a professor of agriculture at Kansas State University, said he does not expect the data to have a great effect on farm policy, though it will generate interest.

"It will cause lots of discussion in rural America, neighbor looking at what neighbor got," Flinchbaugh said Monday. "It'll be great coffee-shop talk."

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