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New EWG Analyses: Subsidies on Autopilot: EWG's Projected Direct Payment Subsidies How EWG Projected Direct Payment Subsidies Projected Beneficiaries and Businesses Farm Businesses That Would Receive $1 million+ Over 5 Years Additional Analyses Projected Beneficiaries and Businesses by State Other Information Data Used in This Website (USDA backgrounders) 
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Subsidies on AutopilotFarmers Receiving Record Crop Prices and Earning Record Incomes Want Billions in 'Direct Payment' Subsidies On Top For decades, the farm subsidy lobby has claimed that if the producers it represents could earn their living in the marketplace, support provided by taxpayers through periodic "farm bills" could be invested instead in such perennially short-changed priorities as conservation, nutrition assistance for low income Americans, and rural development. But even though many subsidized farmers are projected to receive record crop prices and earn record farm incomes over the next five years, the subsidy lobby is still demanding $26 billion in automatic payments from taxpayers over that period in the 2007 farm bill. Up to $26 billion will be provided over the next five years in direct crop subsidy payments under the farm bill passed by the House of Representatives in July and companion legislation approved by the Senate Agriculture Committee the last week in October. A legacy of the 1996 "freedom to farm" contracts that were intended to wean farmers from decades of dependence on crop subsidies, direct payments were authorized under the 2002 farm bill. If extended in a final 2007 reauthorization, direct payments would constitute by far the single largest spending category for farm subsidies between 2008 and 2012. Both the Congressional Budget Office and USDA project robust prices for subsidized crops over the next five years, driven by continuing strong export demand for major crops and the price-boosting effect of the ethanol boom on corn and other commodities. As a consequence of these high market prices, a decline is also expected in farm subsidy payments that are triggered when market prices dip below support levels set by Congress. But one major category of farm subsidies - direct payments - are made automatically to farm businesses and beneficiaries who qualify without regard to crop prices or farm income. These payments currently average about $5.1 billion per year, and would be paid in like amounts over the next five years under pending legislation. This analysis presents EWG projections for direct payment subsidies over the next five years if Congress extends the program in its current form. (More information about the projections and some of their limitations is presented here). Five Crops, 93 Percent of Direct Payments If extended under the 2007 farm bill, 93 percent of these direct payments subsidies will go to five crops (corn, wheat, cotton, soybeans and rice) over the next five years. Seven States Will Get Half The Money Just seven states will collect half of all the direct payment subsidy over the next five years: Iowa, Illinois, Texas, Nebraska, Kansas, Minnesota, and Arkansas. Senate Agriculture Committee States Will Get Two-thirds of Direct Payments The 19 states on the Senate Agriculture Committee will collect 61 percent of the direct payment subsidy money from taxpayers. Direct Payment Subsidies Will Flow To Relatively Few Beneficiaries Big farm operations and their owners gain the most from farm subsidy programs generally, and it is also true of the direct payment subsidy. Based on USDA computer records, EWG has identified 1,200,377 beneficiaries who would likely collect direct payment subsidies under an extension of the current program. The payments would total $26.2 billion. EWG analysis shows that the top 10 percent of projected direct payment beneficiaries, however, will collect 60 percent of those subsidies if Congress simply extends the current program. These 152,000 beneficiaries (most of whom are individuals) will take in $15.8 billion or an average of $104,000 each over five years or nearly $21,000 each per year . At the very top of the direct payment subsidy beneficiary list, the top 1 percent of beneficiaries (15,200 of them) will collect over $3.3 billion, or a five year total of $220,500 apiece, or more than $44,000 apiece each year. Breakdowns for payment concentrations by state are available for all states. For example, in Arkansas, the top 1 percent of beneficiaries (330 of them) will collect an average of $370,100 over five years, or about $74,000 each (example table for Arkansas). Top Beneficiaries: We're Talking Six Figures Over Five EWG has ranked the top prospective beneficiaries of direct payment subsidies over the next five years if Congress simply extends the current program. Most of those beneficiaries are individuals who could receive the benefits directly, or as a pass-through from a farm business in which they have an ownership interest. Some of the beneficiaries listed by USDA are government or business entities that are the "ultimate" beneficiaries of the program because benefits could not be tracked further to individuals. The Top Ten Beneficiaries nationally include state governments, several universities, and individuals with interests in large farming operations, all of whom are projected to receive in excess of $600,000 in direct payment subsidies over the next five years if Congress maintains the status quo for this program. Big Farm Businesses Will Reap Millions Like other crop subsidies, direct payments are linked to production (acreage and per acre yield). The larger the farming operation, the greater the direct payment subsidies it stands to receive. If Congress extends the direct payment subsidies with no reforms, taxpayers will be sending millions of dollars to some of the largest, wealthiest farming operations in America, even if they are making record incomes as a result of high market prices. Nationally, EWG projects that 263 farm businesses will collect one million dollars or more in direct payment subsidies over the next five years if Congress extends the program as is. While these businesses are located in 25 states, most are in the South or California. Mississippi will have 62 such entities, Arkansas 51, California 30, Louisiana 23, Arizona 22 and Texas 14. (To see a list of these projected millionaire farm business beneficiaries within each state, just click on the states in the table or visit them from the state pages.) Nationwide, the top business beneficiary for direct payments over the next five years will be an enormous farming operation in Louisiana, called Balmoral Farming Partnership, which stands to collect $3.3 million between 2008 and 2012. |
