It's been years since I worked in agricultural policy, but as I read "In battle over deficit, farm aid on the block" by Hal Bernton of the Seattle Times, I shook my head.
REALLY BIG SNIP -- three corrections and several additions can be seen on the original article.
Per County and Per Farm - Poor Metrics
The article presented data on "subsidies by county" as though "county" were a uniform measurement -- probably because that's what was in the EWG report. Note to Bernton: Whitman County, WA, is 2,178 square miles. The rural county in Georgia where I was born: 334.64 square miles. The very rural county that is home to my "family farm": 337.63 square miles. "Per County" statistics are meaningless.
The article presented data on "subsidies by farm" as though "farm" were a uniform measurement. It's not. Bernton focused on Wheatlife Farms, the largest Whitman County "recipient of federal subsidies." Farming has a distribution not unlike many other economic sectors (pdf): it has a "head" and a "tail."
Most U.S. farms—98 percent in 2007—are family operations, and even the largest farms are predominantly family run. Large-scale family farms (annual sales of $250,000 or more) and non-family farms account for 12 percent of U.S farms but 84 percent of the value of production. [...] Small farms are less profitable than large-scale farms, on average, and their operator households tend to rely on off-farm income for their livelihood... Although small family farms produced only 16 percent of agricultural output, they made more significant contributions to the production of specific commodities: hay, tobacco, cash grains and soybeans, and beef cattle.
Think of this as a variation of the 80-20 rule. Commodity farming is capital-intensive: land and equipment and know-how. Almost half (45%) of American "farms" are "residential/lifestyle" operations.
Medium-sales (annual sales of $100,000 to $249,999) and large-scale farms received 76 percent of commodity-related Government payments in 2007.
Clark Miller pointed out that his farm supports 10 families, all descendents of Glen Miller who began acquiring farmland in the 1940s. And rich, they ain't:
My income level off this farm is so low that I'm personally eligible for food stamps, Miller said. But I'm too stubborn to apply for them.
Failure To Explain Program Constraints
Did Bernton use this as an opportunity to talk about farm income over the 16-year period that EWG provided its farm subsidy data (1995-2010)? No. He transitioned to Miller saying that he was willing to forgo direct payments when "grain prices are high."
What does this mean? Bernton didn't explain. Here's USDA:
Direct payments are available to producers with eligible historical production of wheat, corn, grain sorghum, barley, oats, upland cotton, rice, soybeans, other oilseeds, and peanuts.
OK, these are payments made for a variety of crops based on a historical production record.
A direct payment is equal to the product of the payment rate for the specific crop, the historical payment acres (85 percent of base acres in CYs 2008 and 2012 and 83.3 percent in CYs 2009-11), and the historical payment yield for the farm... Direct payment rates are unchanged from the 2002 Farm Act. However, the direct payment rate is reduced by 20 percent for producers electing to enroll in the ACRE program.
Congress set a rate in 2002, and USDA pays out based on acres and historical yields. The rate was put in place by a Republican Congress under a Republican President.
Farmers who elect to participate in ACRE are signing up for counter-cyclical support "triggered by a decrease in national average market prices or State planted yields." Note the farmers Bernton interviewed both endorsed a program like this; Bernton did not elaborate or tell us if these farmers are already part of ACRE.
What about limits on direct payments?
The payment limit on direct payments is $40,000 per person per crop year for producers not participating in ACRE... Producers with adjusted nonfarm gross income of over $500,000 averaged over 3 years or with adjusted farm gross income of over $750,000 averaged over 3 years are not eligible for direct payments.
This is a more nuanced limit on payments than that presented by Bernton:
Under the current farm bill, wheat growers can receive payments as long as their gross farm incomes don't exceed $750,000 annually.
Note Bernton again ignores ACRE -- the higher rate is available only to those producers. And the reason for the three-year average? Agriculture is known for boom-and-bust cycle because "success" depends on variables beyond the control of the farmer: sun and rain.
Here are some data points to chew on (pun intended):
- In 2008, for every dollar we spent on food to consume at home, 84.2 cents went to marketing and processing and 15.8 cents went to farmers. And 4.2 cents of the 15.8-cent farm share was value added from nonfarm supply chain industry groups, such as energy, transportation, and financial services.
- 2010: "The U.S. is now spending more on food assistance than at any time in its history ... a cost of $73 billion a year..."
- Food expenditures by families and individuals as a share of disposable personal income - at home: 1929 - 20.3% ; 1959 - 14.3% ; 2008 - 5.6%.
The sad thing is that I see how this could have been part of a larger package that was both fair and educational. However, as presented, it is neither.
For example, an examination of federal ethanol policies and their impact on global food prices would be useful but it would tweak corporate noses in a way that this article did not.
I've now bought the Sunday Seattle Times two weekends in a row -- my first such purchases in months. I won't be buying it again any time soon.