Via Wolf Street

Individual recipients don’t even have to work on a farm; people getting these payments can be “city slickers.”

By Wolf Richter for WOLF STREET.

Unlike food stamps and other welfare programs that are strictly controlled and limited by income, farm subsidies place few such obstacles on the folks that receive them. “Many recipients never have to set foot on the farm or ride in a tractor to get paid,” according to an analysis by EWG of Department of Agriculture records that it had obtained under the Freedom of Information Act.

The analysis covers the $33 billion spread across two farm subsidy programs: The Market Facilitation Program (MFP) created to offset the effects of the trade war against China, and the Coronavirus Food Assistance Program (CFAP).

EWG’s analysis found that the “largest and wealthiest U.S. farm businesses received the biggest share of that $33 billion in payments.” And in earlier analyses of the data, it revealed that “thousands of people who live in cities, and some who live on golf courses” have received MFP payments.

The Market Facilitation Program (MFP).

The purpose of the MFP is to compensate farmers for the effects of the US-China trade war during which China reduced its purchases of US agricultural commodities. Under this program, the US government paid farmers $23 billion from 2018 through June 30, 2020, not including crop insurance premium subsidies.

The administration set the maximum a person could receive under the MFP for 2018 at $125,000. But for 2019, this per-person limit was doubled to $250,000, which, according to EWG, “sent an extra $519 million to the largest farms.”

The payment limit applies only to individuals, and according to EWG, farms can have many people who get payments, with each individual getting up to $250,000. And these individual recipients don’t even have to be on a farm, as long as they qualify as “active personal management.” According to EWG, all these recipients would need to do qualify under active personal management is “dial in to a few shareholder conferences a year.” These people that are getting these payments can be “city slickers.”

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An audit by the Government Accountability Office (GAO) released September 14 (PDF) found that eight of the 25 recipients that received the largest payments in 2019 qualified only through “active personal management.”

On August 24, the USDA released new rules to tamp down on the abuses of the “active personal management” qualification. Going forward, the new rules would require recipients to contribute at least 25% of the farm’s total management, or 500 hours of management a year. But these new rules apply only to traditional farm subsidy programs and do not apply to the MPF or CFAP programs.

So, now that we know what “recipient” means… EWG’s analysis of USDA records found that the largest 2% of recipients received nearly a quarter of these subsidies, averaging $390,223 per farm, but that the smallest 80% of farms – the small and medium-size farms – received just 23% of the subsidies, or on average $9,109 each:

Rank of Recipients % of total Payments # of Recipients Total Payments 2018 to Jun 2020, billion $ Average per recipient
Top 1% 16% 7,267 $3.8 $524,689
Top 2% 24% 14,534 $5.7 $390,223
Top 5% 41% 36,337 $9.5 $261,258
Top 10% 58% 72,674 $13.5 $185,412
Smallest 80% 23% 581,400 $5.3 $9,109

And these farm subsidies can be layered on top of other subsidy programs, with a farm receiving multiple subsidy programs. EWG:

For example, two of the largest MFP recipients were Smith & Sons, based in Bishop, Texas, which got total payments of more than $3.2 million, and Deline Farms Partnership of Charleston, Mo., which received more than $2.9 million.

EWG also points out a further complication in even digging into the data, and “another blow against federal farm program transparency”:

Records of 2019 top recipients also list several banks and financial institutions. If a farm had an operating loan with a bank, the bank received the farm’s bailout check, and USDA listed them as recipients in response to our FOIA request. Many of the biggest MFP recipients in the Farm Subsidy Database are now banks – another blow against federal farm program transparency, because if the checks are sent to banks, taxpayers do not know who is actually getting the money.

The Coronavirus Food Assistance Program (CFAP).

The purpose of this program is to help farmers deal with the economic downturn resulting from the Pandemic. “As of Sept. 13, CFAP payments totaled more than $9.9 billion, but the Department of Agriculture has not yet responded to EWG’s FOIA request for records of the most recent payments,” EWG said. The administration last week announced an additional $14 billion for the CFAP.

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So this is just the beginning of this program. EWG’s analysis of USDA records, covering $5 billion in CFAP payments through June 30, 2020, found a similar pattern, with the largest 5% of farm enterprises getting nearly 50% of the subsidies (not including crop insurance premium subsidies):

Rank of Recipients % of total Payments # of Recipients Total Payments 2018 to Jun 2020, billion $ Average per recipient
Top 1% 22% 3,089 $1.1 $352,432
Top 2% 33% 6,178 $1.6 $265,053
Top 5% 49% 15,445 $2.5 $159,257
Top 10% 62% 30,890 $3.1 $101,286
Smallest 80% 23% 247,126 $1.2 $4,677

And since these farm subsidies can be layered on top of each other, the EWG found that the largest CFAP payment through June went to Titan Swine of Ireton, Iowa, which received over $2.5 million under multiple programs.

The EWG’s database of farm subsidies is public and searchable, including by farm business names.

As the analysis shows, these farm subsidies – taxpayer-funded welfare programs – like so many subsidies, give crumbs to small entities that might need the subsidies the most, and give the largest operations the lion’s share, whether they needed it or not, with many recipients not even working on a farm but living in big cities around the country.

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