The Rural Development Office with the U.S. Department of Agriculture has awarded a grant of $195,000 to the South Dakota Value-Added Agriculture Development Center.
"The Value-Added Agriculture Development Center is an important resource for producers across the state," Sen. John Thune, R-S.D., said. "This grant will help the center continue providing assistance to farmers and ranchers in implementing new technologies and exploring the new opportunities in value-added agriculture that exist in South Dakota."
The grant comes from the office's Rural Cooperative Development program.
As South Dakota’s Congressional delegation race to the media to see who can get the most credit for saving the South Dakota family farms with passage of a Farm Bill, Fox News puts up this Brian Reidl Heritage Foundation report on who is really benefiting the most from farm subsidies:
Washington spends more on corporate welfare than on homeland security — and farm subsidies are America's largest corporate welfare program. This year, as lawmakers rewrite the farm programs and push up their spending, they will invoke Norman Rockwell imagery to portray farm subsidies as a vital lifeboat for small, struggling family farmers. Don’t believe a word of it.
Farms have come a long way since subsidies were introduced as a temporary solution to alleviate the effects of the Great Depression. Today, the average farm household earns $81,420 and has a net worth of $838,875 — both well above the national average. Farm incomes are setting records, and farms have one of the lowest failure rates of any industry.
To be sure, some family farmers continue to struggle. But if farm subsidies were really about alleviating farmer poverty, then lawmakers could guarantee every full-time farmer an income of 185 percent of the federal level ($38,203 for a family of four) for under $5 billion annually — one-fifth the current cost of farm subsidies.
Instead, small farmers are largely excluded from farm subsidies. Farm subsidy payments are based on acreage, so by definition, the largest agribusinesses get the largest subsidies. Consequently, commercial farmers — who report an average income of $200,000 and net worth of nearly $2 million — now collect the majority of farm subsidies. Most farm subsidy dollars go to millionaires.
The Environmental Working Group’s farm subsidy database reveals that from 1995 to 2005, farm subsidies have been distributed to Fortune 500 companies such as John Hancock Life Insurance ($2,849,799) and Westvaco ($534,210); as well as celebrity hobby farmers like David Rockefeller ($553,782) and Ted Turner ($206,948). Even Members of Congress who vote on farm legislation have received subsidies, such as Sen. Charles Grassley (R-Iowa, $225,041) and Rep. John Salazar (D-Colo., $161,084).
And here is why farm subsidies are actually destructive to the small guy:
Small farmers are harmed the most by farm subsidies. Excluded from most subsidies, they must endure the lower crop prices, higher farmland costs and industry consolidation that result from subsidies to agribusiness.
Despite all these problems, lawmakers assert that the agricultural industry would collapse without subsidies. Hogwash. The vast majority of farmers thrive despite few, if any, subsidies. In fact, 90 percent of all farm subsidies are linked to just five crops — wheat, cotton, corn, soybeans and rice. Producers of fruits, vegetables, beef and poultry receive almost no farm subsidies. Yet they earn healthy incomes, and supermarkets are filled with their products. Free enterprise already works for all other farm production, and it can surely work for the few remaining subsidized crops.
So which one of our Congressional delegation has the courage to stand for the truth and inform South Dakotans that a limited government is what is best for the small guy, and that the farm bill is nothing but corporate welfare that makes the rich richer at the expense of the taxpayers.
Now, it's the Democrats’ turn, and it looks as if they will give the pork lovers in the GOP a run for their money.
After making an early show of identifying and suspending earmarks – those costly set asides otherwise known as pork – Democrats are literally cramming pork into the bill they are putting together to fund the troop surge in Iraq.
Let's be clear: Most Democrats want to give up on the war there, but they are afraid to vote against the money for our troops. Now, they will be able to tell the anti-war crowd, "I wanted to vote against the bill, but there was all this money for projects you support so I HAD to vote for it."
Pretty lame, huh?
Some have said Democrats have no strategy, but these people are wrong. The current Democrat strategy is: Bleed the taxpayers!
Currently, there is more than $20 billion in the bill that is not remotely related to the war effort, including:
$4.3 billion to bail out farmers hurt by droughts, freezes and other regrettable but predictable problems that should not be used to undermine the war effort.
$74 million for the fat-cat peanut farmers, one of the most coddled special interest groups on earth. It may be hard to believe, but you can't grow peanuts in this country without a peanut quota. This holds down the supply and drives up the price. Now, the Democrats want to hand the peanut farmers our hard-earned tax dollars to pay their storage and handling fees as they market their overpriced crop.
$283 million in subsidies for small dairy farmers, another coddled special interest group. Milk may do a body good, but this county over produces dairy products because we continue to hand farmers money just for being there.
$400 million for the low-income energy assistance program. Democrats have blocked efforts to tap our oil resources, as well as efforts to build nuclear power plants. This keeps us at the mercy of foreign oil suppliers, which drives up the price of energy for everyone.
$400 million set aside to help the timber industry in Oregon, which has been hurt became these same Democrats don't want trees harvested in our national forests. Wasn't that why they were set aside in the first place?
The smell of pork frying in Washington is stinking up the place again. This kind of spending is wrong in an appropriations bill but, in a bill to fund the war effort, it is an outrage!
After Independence Day, one would have to wonder about government dependency and its impact on freedom. We have no farther to look than in South Dakota. The Aberdeen News has a report on landowners who have chosen to take money from the government in exchange for their property rights:
Area cattle producers suffering from drought, mainly west of Aberdeen, are frustrated that the government won't let them make hay now on land enrolled in the federal Conservation Reserve Program.
"Believe you me, that is all we hear from morning to night," said Gloria Huber, a program technician at the federal Farm Service Agency's Campbell County office in Mound City. "They are desperate to cut that CRP hay now."
Many area herds have already been sold because of a lack of food and water.
Because of the drought, the feds have granted grazing on some of the land that's put in reserve in exchange for cash from the U.S. Department of Agriculture. The problem, Huber said, is that many producers would have to put up miles of fences to graze it.
Wetland CRP has not been approved for grazing, even though that land, too, is dry as bones this year, Huber said. Producers would have to fence off wetland CRP to graze regular CRP.
"If they can't graze the whole thing, they'd have to be fencing forever and a day," she said.
The government says haying can begin in early August. A main reason for delaying haying for a month is to protect baby pheasants that hatched earlier this summer from mowers' sickle blades and balers.
But cattle need feed now, and the forage that grew on CRP land is deteriorating fast, Huber said.
"If we have to wait until August, there won't be anything left, with all the heat and no rain."
This is the danger of those who buy into the Tony Dean philosophy of government intrusion into our lives. Landowners need to take a second look at the Federal farm programs. Some have \looked at it as free money, but it is not free. The cost is your property rights and freedom.
In yesterday’s Argus Leader, the current drought situation was addressed by John Thune:
South Dakota will receive $2 million in drought relief from the federal government, but losses are at least 50 times greater, Sen. John Thune said.
"It's a drop in the bucket, but at least the USDA is acknowledging there's a problem out there," Thune said. "I wouldn't be surprised if it's 100 million bucks by the time this thing's done. There's no winter wheat. There's no spring wheat. It's a total bust, and from a livestock standpoint there's no hay."
The Washington Post has a report detailing how many who do not farm receive billions fron the farm program:
Even though Donald R. Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years.
Yet under a federal agriculture program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual "direct payments," because years ago the land was used to grow rice.
Matthews is not alone. Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by the Washington Post.
Some of them collect hundreds of thousands of dollars without planting a seed. Mary Anna Hudson, 87, from the River Oaks neighborhood in Houston, Texas, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709.
How this came about was tied to the actions of Tom Daschle:
The program that pays Matthews was the central feature of a landmark 1996 farm law that was meant to be a break with the farm handouts of the past. Subsidies began when the Roosevelt administration stepped forward to support millions of Depression-era farmers suffering from low prices. By the early 1990s, U.S. agriculture was a productive marvel, yet was still mired in government controls and awash in complex subsidies.
When the Republicans took control of Congress in 1995, they brought a new free-market philosophy toward farm policy. In a break with 60 years of farm protections, they promoted the idea that farmers should be allowed to grow crops without restrictions, standing or falling on their own. The result was the 1996 bill, which the Republicans called Freedom to Farm.
The idea was to finally remove government limits on planting and phase out subsidies, but GOP leaders had to make a trade-off to get the votes: They offered farmers annual fixed cash payments as a way of weaning them off subsidies.
That sweetener was needed to win over wheat-state Democrats - led by Senate Minority Leader Tom Daschle (South Dakota) - and GOP House members from rice and cotton districts. Wheat growers alone stood to receive $1.4 billion in the first year. The payments for rice growers were increased by $52 million at the last minute in an effort to win support from Sen. David Pryor (D-Arkansas).
The new payments were calculated on a farm's "base acres," or production dating to 1981. For example, if a farmer had planted 400 acres of rice, he was entitled to a check of about $100 an acre, or $40,000, every year. The amount per acre varied depending on past production.
The payments were unrestricted - farmers got them whether or not they grew any crops, or whether prices were high or low.
Here more on the farm program pork:
"The original intent was to make a step in the direction of eliminating farm programs," said then-House Majority Leader Richard K. Armey (R-Texas), who led an unsuccessful fight in the 1990s to trim the subsidies. "By 1998, there was no zeal left."
Instead of cutting, Congress ended up expanding the program, now known as direct and countercyclical payments. A program intended to cost $36 billion over seven years instead topped $54 billion.
"The farm policy we're pursuing now has no rhyme or reason, and we're just sending big checks to big farmers," said Gary Mitchell, now a family farmer in Kansas who was once a top aide to then-Rep. Pat Roberts (R-Kansas), the 1996 bill's House sponsor. "They're living off their welfare checks."
Efforts to overhaul the farm subsidy network have been repeatedly thwarted by powerful farm-state lawmakers in Congress allied with agricultural interests.
"The strength of the farm lobby in this town is really unbelievable," Armey said. "I don't think there's a smaller group of constituents that has a bigger influence."
Now we have developments using the farm program to market their lots:
At a housing development rising from old rice fields on the outskirts of El Campo, 70 miles southwest of Houston, local real estate broker John K. Petty purchased a 75-acre tract from investors in July 2002. He held on to it for a few months, then carved it up and resold it for housing.
"At one time, the area was all farmed in rice," said Petty. Now, the dusty tract is perfect for what he calls "cowboy starter kits," residential tracts owned by nonfarmers but still large enough to keep a horse in the back yard.
Petty informed potential buyers that because their land had once been an active rice field, they could collect an annual payment from the USDA on the portion that was not developed. They did not have to grow rice or anything else.
"If you have 10 acres and build a house on one, you can continue to get farm payments on those other nine acres without farming," said the USDA's Johnson.
Petty used it as a selling point.
"Does it increase the marketability?" Petty asked. "Sure it does."
Duane Korenek bought 17 acres at the site and is building a house. Korenek said it was "common knowledge around here" that the new owners could collect farm payments. He has received about $2,550, USDA records show.
And the biggest landowners get most of the money:
The large landowners who control vast sections of the once-sprawling rice fields outside Houston have been some of the biggest beneficiaries of the 1996 law, USDA records show.
Diana Morton Hudson is a corporate securities lawyer whose 87-year-old mother, Mary Anna Hudson, owns an interest in two tracts of land in nearby Matagorda County. USDA records show that Mary Anna Hudson has received $191,000 since 1997 on land she doesn't farm. "We just pay someone to mow it, and it just sits there," said Diana Hudson.
Later, she added: "I'm a corporate securities lawyer. I couldn't even locate these two parcels in Matagorda."
Houston heart surgeon Jimmy Frank Howell has received $490,709 since 1996 in payments tied to old rice tracts on a vast ranch near Raywood in Liberty County where he now raises cattle, USDA records show. The last rice produced on the 10,000-acre property was "probably over 10 years ago," according to Susan Cotton, Howell's business manager. "We're not rice producers anymore."
For Guy F. Stovall III, an El Campo banker who helps oversee thousands of acres of family lands in Wharton, Matagorda and Jackson counties, the 1996 farm law was a chance to get out of rice farming and convert properties inherited from his grandparents to other uses.
Ten years later, taxpayers are still paying for the transition. Records show the land owned by Stovall and two trusts set up by his grandparents have generated $1.8 million in rice subsidies since 1996.
As small family farms and ranches struggle due to the drought, many non-farmers are sucking the money out of the farm program. Perhaps those on the left should think twice when they blame only taxpayers for the federal deficit.
People in KELOLAND have always had this love/hate emotion about farm subsidies. Forays into the world free market have never worked well since other countries, many of which are socialist but don't think they are, continue to subsidize their farmers to the max.
Yes, Democrats "are socialists but don’t think they are". Hemmingsen then makes the case for a Bush implementation of Reaganomics:
Well, we'll have to see what shakes out, but I wonder if amid his son's mimicry of Reagan policies George Bush The Elder ever asks George The Younger if he's noticed the four years between the end of Reagan's first two terms and the beginning of Bill Clinton's era. Except for the choice of war zones there isn't a whole lot in common with Dad's four years.
Add this free market revival to the rest of the President's economic plans and we'll be able to look back on his current term as the third term of the Reagan Administration. If all this works, we should add Reagan to Mount Rushmore if for no other reason than he'll have been the first to have served as president posthumously. Woodrow Wilson came close, but no cigar.
THe Heritage Foundation (via Glenn Reynolds) provides us with a sampling of those evil wealthy who the Democrats charge with not deserving a tax break, but then deserve to receive large amounts of farm subsidies:
David Rockefeller, the former chairman of Chase Manhattan and grandson of oil tycoon John D. Rockefeller, who received 99 times more subsidies than the median farmer;
Scottie Pippen, professional basketball star, who received 39 times more subsidies than the median farmer;
Ted Turner, the 25th wealthiest man in America, who received 38 times more subsidies than the median farmer; and
Kenneth Lay, the ousted Enron CEO and multi-millionaire, who received 3 times more subsidies than the median farmer.
Again, the Democrats say they are out to save the small family farmer, but their big government programs only serve to help the big guy swallow up the little guy. See this post for more on how Democrats are for keeping the poor, poor.
Rich Lowry has an interesting NRO column regarding farm subsidies. Excerpt:
The system is supposed to help family farms — but if this is a family-farm-friendly government program, what would a hostile one look like? Family farms aren't big enough to garner the largest subsidies and are squeezed by the way the federal payments increase land values and stimulate overproduction. "The subsidies reward the guy who gets higher yields with higher subsidies, and he's able to buy out his neighbor and get even bigger," says Dennis Avery, an agriculture expert at the Hudson Institute.
Ten percent of farms — i.e., the biggest ones — receive 60 percent of the subsidies. According to Brian Riedl of the Heritage Foundation, giant Riceland Foods got $110 million in federal largess alone last year. By his calculation, the feds could guarantee every full-time farmer an income of $35,000 a year at a cost of "merely" $4 billion. Subsidies now run roughly $15.7 billion annually.
American agriculture has its share not just of welfare queens, but welfare cheats. Federal subsidies are technically designated only for those who actually work in farming. But that restriction is evaded, sometimes by people occasionally participating in farm-related telephone conference calls. Dubious partnerships are a way to get around restrictions on how much any one operation is supposed to get in federal payments. As a result, some agriculture businesses are little better than Enrons with tractors.