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US Farm Subsidies Plagued with Corruption

Business In The Beltway
Milking The Farm Program
Ira Carnahan, 07.21.04, 12:32 PM ET
Forbes.com

WASHINGTON - What do Kenneth Lay, Robert "Ted" Turner, Sam Donaldson and
David Rockefeller have in common? Each has collected thousands of dollars a
year in federal farm subsidies, compliments of U.S. taxpayers.

When Congress passed the latest farm bill in 2002--at a whopping price tag
of $180 billion--the stated goal was to help struggling family farmers. But
the reality, finds a new study from the Heritage Foundation, is something else.

"Most farm subsidies are distributed to large farms, agribusinesses,
politicians and celebrity 'hobby farmers'," Heritage says. "Farm
subsidies," the group adds, "have evolved from a safety net for poor
farmers to America's largest corporate welfare program."

Heritage offers a harvest of examples. Riceland Foods, in Stuttgart, Ark.,
collected a whopping $110 million in 2002, the latest year for which
figures are available. Producers Rice Mill, another private company in
Stuttgart, pulled a further $83.9 million. Cargill, of Minneapolis, Minn.,
was also a big winner, hauling in $10.9 million.

Another big corporate beneficiary was John Hancock Life Insurance, a
division of Manulife Financial (nyse: MFC - news - people ), which
collected $2.3 million in 2002. Other corporations that have collected in
recent years include MeadWestvaco (nyse: MWV - news - people ), which has
received $637,000 since 1995, ChevronTexaco (nyse: CVX - news - people ),
which has received $428,000, and Caterpillar (nyse: CAT - news - people ),
which has received $320,000.

The numbers in the Heritage report come from the Environmental Working
Group, which has sifted through the federal figures to come up with the
names of farm subsidy recipients.

How do rich corporations manage to collect so much? "Eligibility for farm
subsidies is determined by crop, not by income or poverty standards,"
Heritage notes. What's more, the group adds, "the amount of subsidies
increases as a farmer plants more crops. Thus, large farms and
agribusinesses...receive the largest subsidies."

But it isn't just big businesses that pull down the taxpayer subsidies; so
do a lot of wealthy individuals, including some members of Congress, who
vote these ridiculous subsidies into law. Leading the way in the House of
Representatives is Rep. Cal Dooley (D-Calif.), who collected $105,000 in
2002 and has received $626,000 since 1995. Not far behind is Rep. Doug Ose
(R-Calif.), who has collected $604,000 since 1995. Coming in third is Rep.
Tom Latham (R-Iowa), who has collected $438,000.

Over on the Senate side, the top recipients of federal farm subsidies are
Sen. Mike DeWine (R-Ohio), who has received $177,000 since 1995, Sen.
Charles Grassley (R-Iowa), who has received $162,000, and Sen. Richard
Lugar (R-Ind.), who's received $86,000.

Celebrity gentleman farmers are also beneficiaries of taxpayers' largesse.
Rockefeller, the former chairman of Chase Manhattan (now part of J.P.
Morgan Chase (nyse: JPM - news - people )) has collected $518,000 since
1995. Meanwhile, TV mogul Turner has received $207,000. And Scottie Pippen,
a star player for the National Basketball Association's Chicago Bulls, has
received $211,000.