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.
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