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Large Corporate Farms Still Getting Lion's Share of Taxpayer Subsidies

December 13, 2004, 2004, Issue #384
Monitoring Corporate Agribusiness
>From a Public Interest Perspective

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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 ten 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 three 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.

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%
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,
percent collected 72% 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." [
November 30, 2004 ]