Shafting the Farmer Subsidizing Corporate Farming

Farm subsidies-Caps need tougher rules

Star Tribune Editorial July 3, 2004

A few years ago Sens. Paul Wellstone of Minnesota and Byron Dorgan of North Dakota had a fine idea to make crop subsidies fairer for farmers and more efficient for taxpayers: Cap the amount of payments available to any one farmer, so that large corporate farms didn't gobble up most of Washington's money, then write tough rules to enforce the caps.

Congress adopted the payment ceilings -- currently $180,000 per farmer -- but the U.S. Department of Agriculture (USDA) never wrote truly effective enforcement rules. So it was no surprise last month when a federal grand jury indicted a northwestern Minnesota farm family for collecting $5.3 million in federal subsidies by allegedly receiving multiple payments for what was really one big operation.

Nor was it a surprise when the General Accounting Office told Congress on June 16 that there are glaring loopholes in USDA enforcement of the payments cap. The auditors found one farm that used 11 "partners" to collect multiple payments; all the "partners" lived in other states and attended at most five farm management meetings a year.

Closing such loopholes would not be difficult -- in fact, Congress has the chance this summer. Dorgan, a Democrat, has teamed up with Sen. Charles Grbuttley of Iowa, a Republican, to sponsor a bill that would give the USDA good, tough rules for defining a farm and determining when partners are actually engaged in farming. Dorgan is pressing for a vote before the August recess, and he ought to get it.

Why would two farm-state senators put a cap on farm subsidies? Because they recognize that it would serve the public interest and the interests of most small- and medium- sized farms. Congress has only so much money each year to help farmers in times of genuine need, and it should make sure the funds go as far as possible. The best justification for farm subsidies in the first place is that they help small operators ride out the devastating ups and downs of commodity markets -- volatility that large corporate farms should be able to anticipate and survive.

In recent years Washington has spent about $15 billion per year in crop subsidies. Now that the government is running large and persistent deficits, that money is an attractive target for budget hawks. It will be all the more attractive if voters see that it's going out in million-dollar checks to the nation's biggest farms.