Let's give credit where it's due. Hats off to the small, influential Environmental Working Group (EWG). Their Web site (www.ewg.org) and farming subsidy database is, in many ways, excellent: simple to use, easy to understand, chock full of federal fund data about your farming neighbors, relatives and acquaintances.
Congressmen engaged in debate over the 2002 farm bill refer to the Web site as do taxpayers across the nation. EWG claims over 21 million subsidy database hits.
Those hits are easy to understand. Who doesn't want to know what portion of the $71 billion in federal agriculture funds Farmer Bill down the road has pulled in over the last five years? Who doesn't want to know how many ag subsidy dollars NBA star Scottie Pippen, media mogul Ted Turner or reporter Sam Donaldson are raking in? Who doesn't want to speculate on just how Farmer John paid for that new SUV? With their Web site, EWG lets us scratch a somewhat prurient interest while rationalizing it away as “just getting the complete facts.”
Madder than thunder
Except the complete facts don't even enter into EWG's claims. It's been said before: Half the truth is still a lie. And the bottom line here is that the millions of dollars EWG would have us believe are going to individual farmers really aren't. Not even close.
So if we give credit where it's due, we must also give blame. And there is a lot to heap on EWG.
Fred Wyatt doesn't care if the folks at EWG have pure motives. All he knows is they didn't bother to break their numbers down enough. He, like many others, suspect the environmental group stopped short with their data to better position their Congressional lobbying efforts. So far, those efforts have worked. But Wyatt, who farms in southwest Oklahoma, is having none of it.
“I was reading the EWG Web site and pulled the numbers for our county, for neighboring counties, for the state. It just didn't sit right. I knew that there was no way for one person to be able to qualify for all that money. But that's what EWG was essentially saying,” says Wyatt.
“I wanted to look at the numbers because I was interested in how much the top producers around me were getting. I know what the payment limitations are — $40,000 in fixed payment plus $150,000 in LDP — and I said, ‘these numbers just don't add up. There's no way to get around it.’ We've got strict rules about these payments. And if those numbers are right, what am I not doing to get these additional funds?”
As regulations prohibit one individual from receiving the amount of money listed on the EWG Web site, Wyatt surmised that the top 10 had to be corporations or partnerships. Wyatt figured that the EWG numbers were true, but the organization hadn't bothered to take the final data-crunching step.
Here's why: a father and three sons may each have their own farming operations. But in response to bottom line economics, they decide to partner up. After all, it's cheaper to share three tractors instead of having to buy two or three each. Thus, the four men can make more money by forming a partnership or entity.
“I was madder than thunder when I saw the EWG site. In New Mexico, one entity was listed as having received $7.6 million. Well, I later found out it's a whole Indian tribe that got that money. The rest of the story isn't being told!”
Feigning ignorance, Wyatt called a USDA economist he knows and told him about the $7.6 million government payout. Wyatt told the economist he couldn't figure it out. How, Wyatt asked, can someone get around the federal payment limits and the three-entity rule?
“The economist said, ‘I don't know.’ I then informed him it was an Indian tribe. He remembered then and said the Indian tribe signed an agreement with USDA that no individual Indian would get more than $40,000 — which is the payment limit. But all the money is sent to the tribe where it is then dispersed. EWG doesn't tell us that.”
Riceland Foods, Inc.
To put it mildly, Richard Bell, president of Riceland Foods in Stuttgart, Ark., isn't happy with EWG either.
“The EWG puts out misleading data. We at Riceland Foods are consistently listed as the biggest receiver of subsidies under the farm programs. This past year, they listed us at $98.5 million. Frankly, that number is right. The only thing they don't point out, though, is that we have 9,000 (co-op) members and that money is distributed to them. We don't get this money and keep it,” Bell said at the Mid-South Farm and Gin Show in Memphis on March. 1.
Bell elicited massive applause from that audience with his next statement: “I am encouraged. In the last couple of days, (the Center for the Defense of Free Enterprise) has filed a complaint with the IRS contending the EWG has violated its tax-free status and has many things to answer for.”
As of press time, it's not known if the IRS or EWG have responded to the complaint. However, national media — including The Washington Times — have run scathing columns questioning EWG's lobbying tactics, money raising efforts and overall philosophy.
EWG seizes on people's laziness when it comes to research. No one and no profession are immune, says Wyatt.
Jump to conclusions
“Our senators — even here in Oklahoma — are reading the EWG site and don't know the particulars. They're jumping to uninformed conclusions. Of course, it makes it look even worse because EWG used a five-year period to calculate payments. When three of those five years, farmers have extra MLA (marketing loan assistance) payments that Congress added onto the PFC (production flexibility contract) payments. Then there are crop disaster payments and maybe even some CRP payments in there.”
So Wyatt, who has served on Oklahoma's state FSA board during both the Clinton and Bush years, decided to do some of his own digging.
“What we did was take the top 10 entities listed on the EWG Web site and, through FSA, find how many individuals were involved in the partnerships. Each of the entities might have five, six, seven partners — a dad, three sons, a mother-in-law, a grandpa, whatever.”
In Oklahoma, of the top 10 entities listed by EWG includes 48 individuals. Wyatt broke down each of their payments — PFC contracts, MLA (marketing loan), and the rest, and then averaged them.
Over five years:
The top 10 earned a combined $12.6 million. That averages out to $252,000 per entity per year.
The 48 individuals averaged $52,500 per year.
Of that $52,500, only $24,675 per year was paid out in PFC payments (the standard AMTA payment farmers received for participating in the government program based on acreage and yield, etc.).
“Most of the American farmers right now are barely getting by. If it weren't for government payments, I'd say 60 percent of them would be broke. Farmers assume major amounts of risk — we're buying $100,000 to $150,000 tractors if we farm substantial acreage — and prices for our crops have dipped lower than they were decades ago. Much lower! What American wants to work for a wage today that's less than 20 years ago? Would EWG?”
Payment limitation adjustment
Wyatt thinks we'll get a farm bill with — “as much as I hate to see it” — a payment limitation adjustment. That will affect many cotton and rice producers in the South tremendously, he says.
“I was at a meeting with a young producer from Jackson County, Okla., who farms about 900 acres of irrigated cotton. He was very worried about the Senate bill. He told me that if that bill goes through as is and his yield is equal to what he's had the last two or three years — which have been very good at 2.5 to 3 bales per acre - and cotton prices remain the same, he'll lose about $200,000 in LDP payments.”
As of last week, Wyatt says the young farmer's banker wouldn't give him an operating loan.
“If he has to sell the excess cotton once the LDP limit is reached, it won't work. You just can't raise cotton for 30 cents, I don't care how efficient or great a farmer you are.”
Further, Wyatt says his wife is very upset about the Grassley Amendment because, “she's worth $50,000 and I'm worth $225,000. She thinks that's very discriminatory because women are worth less than men. She works hard on the farm just like I do.”
Right now, Wyatt prefers the House version of the Farm Bill. It needs modification, he says, “but it would fit most farmers in the South better than the alternative.”