Who Feeds at Farm Subsidy Trough?
Federal dollars go to marching bands and nonprofit foundations
THRALL, TEXAS — WHEN you think of federal agricultural subsidies, images of corn farmers in Iowa or Kansas wheat growers probably spring to mind.
But those federal dollars also find their way into the budgets of state public schools and universities. Unlike ordinary farmers, these nonprofit entities do not pay income taxes on subsidy receipts.
Consider the Stiles Farm Foundation. This debt-free, 3,100-acre model farm in central Texas has accepted more than $1 million in corn, oats, sorghum, cotton, and wheat subsidies since 1985. Without those payments it would be ''losing equity,'' says a spokesman for Texas A&M University, whose regents are the foundation's trustees.
Yet since it was founded in 1961, the foundation has given $430,000 in scholarships to Texas A&M students. It also bestowed another $250,000 on the financial management chair in agricultural economics.
Taking a closer look
Out of $100 billion in farm subsidies shelled out over the last decade, $50 million went to recipients that the US Department of Agriculture lists as ''public schools.'' Though a tiny fraction of total farm subsidies, these often overlooked payments are likely to come under closer congressional scrutiny next month when the 1995 farm bill comes up for review.
That federal subsidies prop up a foundation benefiting a wealthy university highlights one of the central issues in the farm-policy debate: How much subsidy fat is there left to trim?
The Congressional Budget Office projects that under current law and marketplace trends, agriculture will qualify for $56.3 billion in subsidies over the next seven years. But Congress has already decided that more must be cut.
Farm advocates on the House Agriculture Committee hope to hold the line at $42.9 billion and continue subsidies beyond 2002. ''Our farmers and ranchers feel like they've already given,'' says committee spokeswoman Jackie Cottrell, citing the decline from previous years. But some subsidy opponents would limit payments to $27.3 billion over five years and halt them after that.
The Environmental Working Group, a watchdog group in Washington that obtained a list of farm subsidy recipients, has criticized wealthy city dwellers and USDA employees who pocket agricultural-program dollars. EWG President Ken Cook says finding schools on the list is not an ''outrage.'' But the public ought to know who's getting federal subsidies so it can ask questions.
''Is this going to the people who most need it? Should we tighten up on what it really means to be a farmer?'' Mr. Cook asks. ''Surely there's a more direct way to support education than this.''
''Public school'' recipients, most of which are found south of the Mason-Dixon line or west of the Mississippi, view subsidies as arising naturally from their worthy, legitimate endeavors.
''We very definitely use subsidies when available to offset the cost of research,'' says Dewey Liccioni, who oversees the finances of the Texas Agricultural Experiment Station.
The agency, which operates under Texas A&M, has received $2.3 million in subsidies since 1985, while its budget for this year is $102 million.
If the new farm bill takes away subsidies, ''it wouldn't break us but it would be significant,'' Mr. Liccioni says.
The University of Arizona's 1,500-acre demonstration farm could not have survived without $2.5 million in federal subsidies, says farm superintendent Bob Roth. ''We're going to have to learn to,'' he predicts.
Rising water costs associated with the Central Arizona Project have forced many irrigation districts into bankruptcy. One survival strategy, Mr. Roth says, is to use water twice. His farm is diversifying into aquaculture in order to raise fish in water later used for irrigation.
Jeff Johnson, assistant director of farm operations at Texas Tech University, says its $2.4 million in subsidies accounted for less than 10 percent of the operating budget for that school's experimental farm.
But they are crucial to profits, which in a good year might exceed expenses by 7 percent. That performance is typical of nearby private farms, he adds.
Not all ''school'' recipients engage in agriculture. Some are owners of farmland operated by sharecroppers. But they made the USDA list because the agency directly pays to landlords their share of subsidies on sharecropped land.
So it is with the two top ''public school'' recipients, Montana, with $27 million in farm subsidies, and Washington state, with $7.6 million. Montana divides the money among public schools and universities for their current operations. Washington uses it to match school construction bonds.
Federal payments to Montana amount to $1 in $4 that it earns on its 560,000 acres of agricultural lands. Thus, ''we're watching the evolution of the '95 farm bill very closely,'' says Kevin Chappell, surface management bureau chief at the state Department of Natural Resources and Conservation. ''We're very concerned.''
Mr. Chappell says that half of Montana's $27 million came from the Conservation Reserve Program (CRP), which in 1985 began paying farmers to leave highly erodible lands untilled. The CRP has been a good program for Montana schools, Chappell says, because USDA guidelines dictate that the landlord gets half of those payments.
What is appropriate?
Congress will not change the CRP in this year's bill, Ms. Cottrell says. Mr. Cook, whose interest in farm subsidies relates to their impact on the environment, was an early advocate of the CRP. But he now says inappropriate acreage needs to be weeded from the program.
Meanwhile, subsidy checks totaling $2.6 million have come every other day for 10 years to Mumford Hall, home of the college of agriculture at the University of Illinois at Urbana.
The money relates to ''dozens and dozens'' of sharecropped farms bequeathed by alumni, Agriculture Dean W.R. Gomes says. But it doesn't always go to his department.
Half of a recent bequest, which would include subsidies, was earmarked for the university's marching band.
''I'm for marching bands,'' Cook comments. ''But is this the way to fund them?''