| 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 The 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 the Agriculture Department
records. In South Dakota, a beekeeper collected $280,000 in subsidies for
his honey.
Its almost a must in the agriculture business today to get some
government support. I think its a good deal, said Wilder, who owns a
series of office buildings and mobile home parks in addition to farm
holdings spread from Indiana west to Colorado and Texas.
King Ranch, which is owned by descendants of 19th-century founder
Richard King, raises 60,000 cattle, grows cotton and grain, and controls
citrus and sugar interests in Florida.
The company, which also has income from tourism, leather goods and oil
and gas royalties, has until now avoided taking federal subsidies.
Frankly, the payments are limited in size. They require a lot of
financial disclosure that we dont want to go through, said Jack
Hunt, the companys president.
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
governments 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. Its known as a certificate
program, although no such paper changes hand; the transactions are done by
computer.
A wide variety of commodities are eligible, including corn, cotton,
rice, sorghum, barley and soybeans. 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 years 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 excess production of surplus
commodities, further driving down market prices, and encourages the
expansion of large farms to the detriment of their smaller neighbors.
Thats hard to see how that serves the public good, said Chuck
Hassebrook of the Center for Rural Affairs, a Nebraska-based activist
group that opposed the program. The single most effective thing
Congress could do to strengthen family farming is to stop subsidizing mega
farms.
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 percent of farm owners, the 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 Grassley, R-Iowa, also is seeking to kill
the program.
The Bush administration hasnt taken a position on it, although
officials believe federal subsidies are distorting markets.
Congress authorized the program as part of a 1999 emergency bill but
left it up to then-Agriculture Secretary Dan Glickman to decide whether to
use it.
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.
Farmers would have made a profit off the forfeitures which dont
count toward the $150,000 subsidy limit because the market value of
the crop was less than the value of the loans, and the government would
have been stuck with the cost of storing the cotton.
Beneficiaries of the program say that payment caps are unfair to large
farms.
The only way that American agriculture will survive will be for
Congress to recognize that only efficient-size operations large
will be able to provide food and fiber for this country and the world,
said Billy Guthrie, general manager of the Panola Co. of Newellton, La.,
which received $694,066 under the program for its 2000 cotton crop.
We arent flying around here in jets. Were just farming and
employing and trying to stay in business, he said.
Richard Adee, the South Dakota beekeeper, was lucky that the program
came along at the same time that Congress revived price supports for honey
that were phased out in the 1990s. Adee, who collected $282,306, says the
program was absolutely a must. |