But farm programs play an important role in rural America and within the agricultural economy, and the vast majority of farmers are decent, hardworking people who are playing with the hand they're dealt.

Quite frankly, one of the reasons farm programs get such a bad rap overall is that you can track the payments back to individuals (most of the time). It's a lot harder to track back the benefits of all the other tax credits and subsidies that the government gives out. Go take a look at the big energy bill the Senate is debating right now - the whole damn thing appears to be a vast collection of corporate subsidies, even if some of those subsidies are for things we should support, such as wind energy. ExxonMobil receives enormous tax credits for oil exploration, and Boeing receives sweetheart government backed financing deals from the Export-Import bank. Government subsidy examples are endless, and those who think farm programs are just the worst example of corporate welfare ever should think again.

In my post earlier this week, I wrote:

Every time EWG updates their database, big commodity groups claim that EWG somehow "distorts" the data for its own purposes.... And when you hear organizations whine about how the King is an aberration, a lone example of farm programs gone bad, don't believe it.

I stand by those statements. I believe that the vast majority of comments printed in the media are from those big organizations that support unlimited farm program checks, like the 3.2 million dollars Maurice Wilder has collected. As far as I am concerned, those organizations do not represent family farmers.

When farmers like Adam Sleeth speaks up, everyone should listen. That includes people out in rural America and people (usually concentrated in Washington, DC) who endlessly criticize farm programs without recognizing the farmers who contribute so much to this country. That farm program check Adam receives is doing a lot more good for this world than both Maurice Wilder's million dollar checks or tax credits for Exxon.

 

Well, Maurice Wilder just happened to be profiled in my local Omaha World-Herald this past weekend. While he isn't busy farming farm programs for oodles of cash, he's pumping oodles of Nebraska's precious groundwater. Or, to be precise, somebody else is pumping it for him:

A man who owns 125 Nebraska irrigation wells has never drilled a single one. Maurice Wilder, 66, of Clearwater, Fla., primarily develops retirement communities, recreational vehicle parks and office buildings in Florida and Texas. And he's never lived here.

As noted above, The King of Farm Programs doesn't confine himself to farming, either. Check out the following data on our little buddy:

* Total holdings nationwide estimated at $500 million in 2005.
* Owns 10 office buildings in the Tampa Bay, Fla., area with more than 1 million square feet of space.
* Has 4,500 mobile home lots and 12,500 recreational vehicle lots in Florida and Texas.
* Commercial and residential land holdings.
* Owns 200,000 acres of farmland and ranch land in eight states. That's roughly 312 square miles, or nearly the size of Douglas County.

Wow. Can somebody please tell me what The King has done to deserve $3.2 million from the US Treasury?

This all goes right to the heart of farm program ideology, which I wrote in a previous post. If you believe farm programs should exist to help family farmers, The King and his millions are an outrage -- an offensive example of wasteful farm program spending.

But as it is, farm programs support every single unit of agricultural production, and there is no real limit on the number of units you can college payments on. Consequently, the nation's largest farms pull down multi-million dollar subsidy checks, despite the claims of politicians and the media that payment limits do exist. (By the way, The King gets most of his money from commodity certificates, which were explicitly set up to evade payment limits).

To be sure, there will be a big ruffle-duffle over the data, with case studies and finger pointing and rhetoric all around. And when you hear organizations whine about how The King is an aberration, a lone example of farm programs gone bad, don't believe it. All you need to remember is that what The King is doing is perfectly legal, because our elected representatives have made it that way.

Check out the EWG database and get yourself all riled up. Then contact the nearest elected representative and tell them you support limiting farm program payments. This year's Dorgan-Grassley bill is a great place to start.

In my last post, I wrote that our  elected representatives create blatant loopholes within payment limits to cater to a small number of individuals. I also wrote that the majority of rural Americans - and farmers - want strict payment limits of the type embodied in the Dorgan-Grassley bill. And to speak the language of political junkies and policy wonks everywhere, there are polls to prove it.

In 2005, a Kellogg Foundation-sponsored poll conducted in Iowa, Kansas and Minnesota found clear preferences for a strict $250,000 cap on farm program payments, which is the proposed cap in the Dorgan-Grassley bill reintroduced two weeks ago. All three states are considered farm states, and both farmers and non-farmers were surveyed. You can find the poll here. A quote from the poll summary:

[By] more than a two-to-one margin (67 percent to 31 percent) voters in these states support limiting direct payments to single farms to no more than $250,000. Interestingly, support is higher among farm income households and Republicans than among voters as a whole.

Since farm income households certainly understand farm programs and their impact, one might assume that their higher support for strict subsidy limits is significant. Not only do voters in these states support strict payment limits, they are willing to take that policy preference into the voting booth:

a majority of voters in each state describe themselves as more likely to support a member who supports limiting direct payments to single farms to no more than $250,000 and at least a third describe themselves as "much more likely" to support such a member.

Going further, voters in these three states strongly endorse programs that create rural jobs, conservation programs, and nutrition programs.

See the first poll chart below the fold:

But what if you survey farmers only? And shouldn't more states be surveyed, including the South, the supposed home of vast enthusiasm for unlimited farm program checks?

Every time a farm bill rolls around, the Farm Foundation surveys agricultural producers in multiple states. This time they surveyed over 15,000 farmers and ranchers in 27 states, and they group results by state and region.

In Iowa, currently a politically key state, you find the following:

On a scale of 1-5, with 5 representing the strongest support, Iowa producers ranked "targeting support to small farms" at 3.94 and "Eliminate the Three-Entity Rule" (a key loophole in payment limits ) at 4.12 - both significantly higher than support for the payments themselves. Iowa producers ranked the importance of direct payments at 3.47, counter cyclical payments at 3.65 and loan deficiency payments at 3.75.

And while the Southern cotton and rice interests supposedly favor the glaring loopholes necessary for enormous subsidy checks, we can actually see this isn't true. For the entire Southern region surveyed (Alabama, Texas, North Carolina, Georgia, Florida) there is substantial support for eliminating the three-entity rule and eliminating unlimited commodity loan gains-two of the most-abused loopholes in farm program payment limits.

You can find the whole poll here (2MB PDF). It is a fascinating look at farmers and ranchers' preferences. To be objective, I should say some of the positions that the Center for Rural Affairs advocates are not viewed so favorably. But the consensus is clear on farm subsidy programs- close the loopholes and enforce a strict payment limit.

In fact, there is such a clear consensus that one wonders why you don't hear more of our elected representatives shouting from the rooftops for strict payment limits. Clearly this is an issue that both Republicans and Democrats agree on, and there is substantial political gold to be mined here. Moreover, when I look at these polls, I expect that all rural elected officials will respect the clear wishes of their constituents - or pay the price.

Not only that, but when I hear all this talk from both parties about how "we need to keep the big subsidies flowing so we can keep the rural vote," I want to scream. Yes, farm programs play an important role and they should not face wholesale elimination. And yes, rural voters and farmers understand that importance and will punish any representative who votes to simply cut or eliminate farm programs in a way that hurts all of rural America. But if anyone says that voting for payment limits will mean an election loss in the future, they are wrong.

Rural people understand better than anyone that we need reform, and payment limits is the place to start. Moreover, they understand that we should take the money saved and put it into rural development, conservation, value-added agriculture, and other programs that will create a future for all of rural America.

Maybe most importantly, they don't particularly care what party that elected official is from.

To put it simply, a significant number of the districts that changed party affiliation in the last election were rural districts. Issues that have a nearly 3 to 1 favorability among likely voters - Democrats and Republicans, farmers and non-farmers - are too important to be ignored. Regardless of party affiliation, incumbents and challengers that seize upon issues such as payment limits will find there is a lot of political hay to be made while the sun shines. The importance of this issue in Iowa and the importance of Iowa in the Presidential nomination and election process could make this an issue in the 2008 Presidential campaign as well, helping separate the wheat from the chaff, as it were.

Beyond the polls, the broader point is the lack of leadership surrounding the issue of payment limits, and issues of rural social and economic justice. Even among those who vote for payment limits, only a small number of politicians are willing to actually be public leaders on the issue. As you might guess, chief among that group is Senator Grassley of Iowa and Senator Dorgan of North Dakota. Not long ago, and not surprisingly, you could count Senator Wellstone of Minnesota as one of those leaders as well. To balance out the party affiliations mentioned here, add Senator Lugar of Indiana to the list. There are not many more. But I cannot emphasize enough that the payment limits issue is not a partisan one, and the lack of leadership has been exhibited in both parties.

That lack of leadership extends beyond the halls of Congress and into the countryside during campaign seasons. There is a clear opportunity for currently elected officials and future candidates to embrace these issues. And they would win. Unfortunately, too many members of Congress view a strict payment limit and other fundamental structural issues in agriculture with great trepidation. A few have become comfortable with the lobby that advocates for unlimited commodity program payments to the nation's largest farms - the Cotton Council, Rice Federation and the other usual suspects. Naively or opportunistically, many more have accepted the conventional wisdom that more federal money to farmers is the way to win in rural districts, irrespective of how the distribution of that money impacts the people and communities it is rhetorically positioned to help.

Rural people and farmers understand payment limits. They understand that it is better to invest scarce budget dollars in rural development, conservation, and new agricultural opportunities instead of sending out enormous subsidy checks. They understand the principles of fair and just farm programs. And they would vote for candidates who articulated those principles and, more importantly, a candidate who strongly supported policies that reflected those principles.

This is my second of three posts on payment limits.

As a concept, the issue of payment limitations is very simple. A producer can receive up to this much money and no more.

Setting a limit or cap (or whatever you want to call it) on farm program payments is an issue that has been around at least since the late 1960s. It has always been controversial, and it has most often broken down as a North vs. South (plus California) fight rather than along party lines. But at its heart, the fight over payment limits is a philosophical disagreement about the purpose of farm programs.

I happen to believe that farm programs should be focused on helping farmers.

Regardless of efficiency or innovation, unlimited payments reward those operations that continuously expand and drive their neighbors off the land. Therefore, I think payments should be limited. I also think the structure of farm programs is important, but whatever the structure, there should be a limit on how much you can receive from the federal government. Without that limit, our tax dollars will be used to subsidize the consolidation and concentration of agricultural production. And that is what is happening today.

Opponents of payment limits argue that farm programs are about helping the agricultural sector. In this view, farm programs primarily exist to address the unique economic nature of agriculture. Enacting strong payment limitations would favor one farmer over another, and that is not the purpose of farm programs. In fact, opponents say, that is unacceptable meddling in the "free markets" of agriculture. It is "bureaucrats in DC selecting winners and losers."

At the Center for Rural Affairs, we believe that this view does not take into account the fundamental nature of farm programs. It is impossible to design a farm program that does not determine winners and losers. Today, the winners are the farmers who play the subsidy game with their lawyers and accountants. And I don't want them to win. I want diversified family farms throughout rural America, and I sure as hell don't want my tax dollars being used to subsidize the destruction of those farms.

So where does our current farm policy fit? Not surprisingly, it is a particularly infuriating mix of these two ideas. Our elected representatives are perfectly aware that the majority of Americans- and the majority of farmers- support a farm program focused on helping farmers, and that means effective payment limits.

So they enact a limit. Right now, that limit is $180,000. But the people who write checks that finance campaigns don't like that limit. They are firmly in the "help the sector" camp in the philosophical fight over payment limits. So politicians start weakening the limit. Politicians enact a loophole that says you can establish multiple entities to receive farm program payments. Now the limit is doubled, to $360,000. Politicians insert a ridiculous "generic certificate" provision, and the explicit purpose is to evade the limit. The provision actually states "generic certificates do not count toward farm program payment limits." Now you have truly unlimited payments. They allow multiple partnerships to be formed to receive farm payments, and do not track who ultimately receives the farm program money. Now even if you wanted to enforce a limit, you can't, because you don't even know who the money is going to.

The Grassley-Dorgan bill, in fact, is mostly about closing these loopholes.

This is the reason the Center for Rural Affairs gets so damn worked up about payment limits. There is a payment limit. Politicians know the vast majority of Americans want limits. Politicians know that United States tax dollars are being used to drive farmers off the land. Yet they continue to pass laws creating loopholes, so the largest, most aggressive farms can receive unlimited payments.

There is a silver lining. When an elected representative is not representing the interests of his or her constituents, there is opportunity. And in many rural areas, including the South, a candidate who supports strong payment limits and a farm bill that helps farmers would have a pretty good chance of getting elected.

For over 20 years family farm defenders have fought to stop government subsidies that destroy family farming. The current system of unlimited subsidy checks for large farms increases land prices, puts family size farms at a disadvantage, and ultimately undercuts rural communities.

Politicians from rural areas have been slow to recognize this, however. Instead, rural politicians wax eloquent about saving family farms while repeatedly passing farm programs that subsidize their demise.

The hypocrisy has been bipartisan.

With a few notable exceptions, northern representatives have given lip service to reforming farm programs, but folded when confronted by the opposition of large farm interests from the South. Elected officials who should know better typically justify unlimited payments as a necessary evil, to maintain the "farm coalition" and get as much money as soon as possible for farm payments.

This is a profound mistake.

Unlimited payments that subsidize large, aggressively expanding operations are a fundamental cause of family farm decline. They exacerbate the family farm decline that farm programs were supposed to address.

Farm and rural leaders continue to push for farm program payment limits, and the issue continues to emerge during farm bill years.

The most recent effort played out in March of this year when Senators Chuck Grassley (R-IA) and Byron Dorgan (D-ND) introduced an amendment to the budget resolution bill calling for limiting subsidies to the nation's largest farms.

The Grassley-Dorgan amendment was a nonbinding resolution calling on the Agriculture Committee to cap farm subsidies at $250,000 per year. A cap of $250,000 means that family farmers would still get the support they need, but big farms would no longer have the unfair advantage of nearly unlimited government checks. Grassley-Dorgan called for the money saved to be reinvested in conservation, rural development, and nutrition programs.

In the end, Senators Grassley and Dorgan withdrew the amendment at the request of the Senate leadership. Senate leaders had counted the votes and concluded the amendment would pass, but feared it would cause southern Senators to block passage of the entire federal budget. To get them to pull the amendment, Senate leadership promised a vote on Grassley-Dorgan in the upcoming farm bill debate.

In my opinion, Senator Grassley introduced the amendment specifically to secure this outcome.

Now they are back. The Grassley-Dorgan proposal has returned as Senate Bill 1486. The bill would cap payments to any one farmer at $250,000 per year and close the loopholes that currently exist. Look for future posts that will explain some of the details of this proposal, why it is a key part of farm bill reform, and updates on the bill's status.