Friday, December 25, 2009

Farm Subsidies -- closer than you think

First - disclosure.  I'm applying to a USDA program that helps farmers buy land.  This program offers loans at an attractive interest rate -- 2% -- and it's designed to help small farmers -- which I am.  The lower interest rate is a subsidy.   As I work through that program I'm finding that the paperwork is how you pay for that lower interest rate.  It's been interesting. 

First, I'd like you to go to the web page at the end of this paragraph.  At the bottom you'll find a "zip code" field.  Type in your zip code if you're a US resident, and it will come up with the names of the people in your zip code who have recieved the most subsidy money.  You'll find the link here

Now notice that when you click on one of those people, it will list the amount and type of subsidy that they have recieved.  There's "disaster subsidy" and "crop subsidy". 

Disaster Subsidy
I'm not really clear on what this is.  The amount here is never bigger than the crop subsidy, and I suspect it relates to a payment for the partial or total loss of the crop. 

Crop Subsidy
This one is the one where most of the money is paid out.  What basically happens here is that the government gaurantees a minimum price for a list of commodity crops, and if the market price falls below that you get a check, or you get some sort of payment for growing that crop. 

Here's a quote from a farm subsidy primer: 

Current law requires USDA to offer support for wheat, feed grains (corn, sorghum,

barley, oats), cotton (upland and extra-long staple–ELS), rice, soybeans, other oilseeds
(sunflower seed, canola, rapeseed, safflower, flaxseed, mustard seed), milk, peanuts, beet
and cane sugar, wool, mohair, honey, dry peas, lentils, small chickpeas, and tobacco. 

We're subsidizing the production of wool and mohair - I had no idea.  Peanuts I knew about -- mostly through Jimmy Carter.   If you want to read the primer, you'll find it here.

So we offer payments for various cereal crops -- but we also subsidize meat.  You can get a check for pigs, lambs, and cattle. 

I don't have a conclusion here.  I'm buying into the subsidy program myself by applying for this loan program.  Thought you might be interested that most of everything that you eat is directly subsidized. 

9 comments:

sheila said...

But we don't subsidize vegetables and fruit? I wonder why we have a national obesity problem.

Anonymous said...

Thanks Bruce. What an eye opener! I wish more of this funding was provided to small family farms. Big business farms are raking in the money even though they complain about low prices. Maybe we should limit the subsidy program to 100k per year, which would make it less profitable for big business farms to tie up all the land which in turn would make owning small family farms more affordable?

Smeltzerville said...

Bruce, I checked out my area of Ferndale and saw a few farmers have received Susidies to purchase land and disaster. I lost a cow last season. I wonder if I can get a subsidy?

Anonymous said...

Pigs, lamb, & cattle do not receive direct subsidies, only the list of crops you mention above. What are you referring to exactly?

Bruce King said...

This publication mentions payments to pork producers based on "emergency" conditions.

http://www.ers.usda.gov/publications/WRS0404/WRS0404App.pdf

I've seen pork, lamb and cattle producers with subsidies in the database for 2005 and 2006. Payments are made.

Bruce King said...

Smelterville: I'd check with your local USDA branch office. Possibly -- the animal program appears to be designed to offset losses -- see the link above. Copy and paste it to go to it.

Karen said...

Holy crap -- I live outside of a don't-blink-you'll-miss-it town and there are 42 people in that zip code listed as receiving subsidies... the top payout to one name was roughly $11K per year for 7 years!

Bruce King said...

I haven't been able to find a zip code that doesn't have someone in it that gets thousands a year.

The farm subsidy is HUGE. Amazingly large.

Anonymous said...

Again, livestock producers don't receive direct payments, but they sometimes can apply for emergency payments for disasters. If you see livestock producers getting direct subsidies, it is for something else, such as the grain they grow for feed. I work for the USDA FSA and I know.