MEDIA RELEASE
November 21, 2001
Written By Kent Thiesse, U of M Extension Service
(507-389-8141)
New Web Site Causes A Stir In Farm Country
A couple weeks ago an organization called the "Environmental Working Group" (EWG) initiated a new web site, which is a database of all farm program payments paid to listed entities (individuals, partnerships, corporations, etc.) in the past five years (1996 - 2000), prior to the current year. This new web site has become a hot topic of discussion in coffee shops, grain elevators, and on farms throughout the Midwest, according to Kent Thiesse, University of Minnesota Extension Service.
Thiesse indicated that the Associated Press made national news in early September, when the results of an analysis of 2000 USDA farm subsidy payments was released. The preliminary results indicated that two-thirds of the $27 billion paid out in federal farm subsidies last year went to only 10 percent of the nation's farmers. They went on to list pro sports figures, media giants, large corporations, universities, etc. that received government farm payments. Before there was even a chance to discuss this information, the story quickly went to the "back burner" following the Terrorist Attacks on September 11th. Thiesse says that the EWG web site database has again put this issue back in the forefront, at a critical time in the discussion of a new Farm Bill.
The EWG web site database allows a person to do a search of farm program payments nationally, by state, by county, by zip code, or individually. At the national, state, county, or zip code settings you can rank the farm payment recipients from highest amount received to the lowest amount received. It will list total payments for the past five years (1996 - 2000), give an annual breakdown of payments for AMTA, market loss assistance, oilseed, LDP, market loan gains, CRP, disaster, and other payments. For an individual entity, it will total the payments from all active counties.
Thiesse said that the reaction to the initiation of this web site is probably mixed, depending upon which group or individuals you talk to. The question that many farmers are wondering is how was this information able to be placed on this web site in the first place and if any data privacy policies were violated. Certainly, the USDA and other Federal Agencies are following up on any irregularities, but it does not appear that any exist. A judge's ruling in a 1996 lawsuit allowed this data to become public information.
According to information on the EWG web site, the "Environmental Working Group" is a not-for-profit" environmental research organization, based in Washington, DC. Funding for the farm subsidy work came from the Joyce Foundation and the Wallace Genetic Foundation. The EWG feels that current farm policy has badly failed almost everyone in agriculture, except the large producers of a few favored crops. They indicate wanting to provide better information on farm subsidies before another Farm Bill is written.
Thiesse did some investigating into the database on the EWG web site and found some of the information to be somewhat misleading to the average person that does not understand government farm payments. First of all, the lead pages for national, state or county data ranks the total farm payments for a five year period (1996-2000) and not by annual payments. For example, a farm entity listed as receiving $200,000 for total payments for five years would be receiving an average payment level of $40,000 per year. Furthermore, in many cases there may be two families that are sharing those farm program receipts for one farm entity, which is not identified in the database.
Thiesse did an analysis of the databank for seven counties in South Central Minnesota. He noted that the "top 10 percent for government payments" which are often referred to in each county are a bit misleading because that is the top 10 percent of all the persons that have received farm program payments. In the seven counties, he found that the farm entity that was closest to being in that "top 10 percent threshold" received an average regular AMTA payment of about $14,500 each year for the five years. This translates into a farm size of about 800-1000 acres in South Central Minnesota. Based on farm business management records in the same region, the average crop farm size was about 710 acres.
Thiesse notes that the regular AMTA payment was the only farm program commodity payment that was guaranteed in the last Farm Bill (1996 - 2002) and the annual payment rate was set on a declining scale for the duration of the legislation. The payments for "market loss assistance" and "oilseeds" have been added in the last three years of the EWG database (1998 - 2000), and again in 2001, to offset extremely low commodity prices and greatly reduced farm incomes. In the year 2000, based on farm business management records in south central Minnesota, the average return per acre without government payments was a negative $62.04 per acre for corn and a positive $1.60 per acre for soybeans.
Thiesse points out that LDP's and "non-recourse" marketing loans were established to encourage farmers to market grain, even when it was below the CCC loan rate. The continued low commodity prices for the past two or three years have led to the large amounts of payments listed for LDP's and gains in marketing loans on the database. Thiesse says that because these payments are based off the county loan rate, which is a minimum price level for commodities, these payments should not be considered as being a large windfall to farm income.
Thiesse indicated that one final observation that he made in reviewing the farm operations listed in the deemed "highest 10 percent farm program recipients" on the EWG web site in the seven counties in south central Minnesota was based on his knowledge of many of these farms. Most of these farm operations are family-based farm businesses operated by persons that live in our communities, support our local businesses, attend our schools and churches, and serve in many leadership roles.
Thiesse feels that as we move forward in designing a new Farm Bill, and many innovative concepts are analyzed, it is important to make sure that we understand the data sources and the resulting impacts of the legislation. He says that if we fail to properly account for all factors in writing a new Farm Bill, we may actually make things even worse financially for the family farm businesses that many are trying to protect.