House May Weigh Strict Cap on Farm Subsidies
A Florida real estate developer, Texas’ massive King Ranch and dozens of other giant farms are cashing in on a program created last year to bypass payment limits on federal subsidies for grain, cotton and other crops.
Maurice Wilder, a Clearwater, Fla., developer who controls 130,000 acres of farm and ranch land in eight states, has collected $1.2 million in benefits to himself and his company, the Wilder Corp., according to records obtained by Associated Press under the Freedom of Information Act.
The normal limit on subsidies that any individual or company can receive is $150,000.
King Ranch Inc., a Houston-based company that owns 825,000 acres, got more than $638,000 under the program, according to the Agriculture Department records. In South Dakota, a beekeeper collected $280,000 in subsidies for his honey.
“It’s almost a must in the agriculture business today to get some government support. I think it’s a good deal,” said Wilder, who has farm holdings from Indiana to Colorado and Texas.
The House is expected to consider imposing a strict $150,000 cap on all crop-based subsidies when it takes up a major farm bill this week.
The program works this way: A farmer takes out a loan on a crop at the government’s price-support rate and then pays back the loan at the local market price. So a farmer could borrow $500,000 on a crop worth $300,000 and pocket the $200,000 difference.
A wide variety of commodities is eligible. The bulk of the money paid out on the 2000 harvest--$280.5 million--went to rice and cotton interests. Two large rice-grower cooperatives in Arkansas collected nearly $150 million between them.
Supporters of the program say the normal payment limits are too low. At last year’s market prices, an 850-acre cotton farm and a 6,000-acre soybean farm would have reached the $150,000 payment limit.
But critics say the program subsidizes production of surplus commodities, further driving down market prices, and encourages the expansion of large farms to the detriment of their smaller neighbors.
“That’s hard to see how that serves the public good,” said Chuck Hassebrook of the Center for Rural Affairs, a Nebraska-based group.
Federal farm assistance already was skewed to large grain and cotton farms. Two-thirds of the $27 billion provided through other programs last year went to 10% of farm owners, AP found.
In a letter last week to fellow House members, Rep. Nick Smith (R-Mich.) said, “Unlimited government price supports for program commodities disproportionately skews federal farm aid to the largest producers.”
In the Senate, Sen. Charles E. Grassley (R-Iowa) also is seeking to kill the program.
Congress authorized the program in 1999 but left its fate up to then-Agriculture Secretary Dan Glickman. Glickman warned at the time that the program could prove embarrassing to farmers. But he went ahead with it, he said, because cotton producers were threatening to forfeit crops to the government instead of repaying federal commodity loans.
