Cash Crop: There's billions on the line in the farm bill, but where does it all go?
JAMESTOWN -- A couple billion dollars for wheat here, another billion for corn there, a few hundred million for soybeans -- maybe more for barley too.
No matter how you slice the numbers, as the federal farm bill makes its way through Congress, Minnesota and North Dakota farmers have big money at stake.
Since 1995, when the Washington, D.C.-based Environmental Working Group first began compiling detailed data on farm subsidies, North Dakota farmers have received about $13 billion in subsidies, according to the group's database. Minnesota farmers have received more than $15 billion.
That aid comes in the form of a hodgepodge of programs, ranging from direct payments per acreage to disaster relief money to subsidies that cover the bulk of the cost of crop insurance.
The new bill, which passed the Senate last week and is expected to be taken up by the House later this summer, will change the landscape of some of that aid, but the basic idea remains the same: A safety net to keep farmers from ruin should business take a hit.
Supporters of the farm program say that safety net keeps the nation's food supply stable and secure.
"We need to recognize that a safe, bountiful supply of food is important," said Woody Barth, president of the North Dakota Farmer's Union. "A good farm bill provides that resource."
Both Barth and Doug Pederson, president of the Minnesota Farmer's Union, said the Senate bill -- which eliminates direct payments in favor of greater crop insurance support, and caps that support for high-income farmers -- strikes a good balance between protecting farmers and controlling costs.
Critics -- including the Environmental Working Group, which wants major program reforms and less overall aid -- say the government goes too far in guaranteeing farm earnings, and diverts too much aid to big farms that don't need it.
"These programs are seeking to almost insure that a farmer will never see a loss," said David DeGennaro, the group's legislative analyst. "We'd like to see a more sane level of protection for farmers."
The current bill expires Sept. 30, and many key details must still be worked out between the House and Senate. In the meantime, The Forum pored through the Environmental Working Group database to break down how much and what kinds of aid regional farmers have received over the past decade and a half.
A few notes on the data:
- All information comes from farm.ewg.org.
- The most recent data was compiled in 2010.
- State and county commodity subsidy totals include crop insurance aid, but crop insurance information isn't available for individual recipients.
Between 1995 and 2010, about 88,000 North Dakota farmers received $6.1 billion in commodity subsidies, which include direct payments, countercyclical payments, and loan programs.
About 148,000 Minnesota farmers received $9.9 billion in commodity subsidies, which include direct payments, countercyclical payments, and loan programs.
- Direct payments: Payments paid at a fixed rate per acre regardless of conditions. These are likely to be discontinued in the next farm bill, saving about $5 billion a year. Barth of the NDFU said they're "indefensible" in strong times such as these.
- Countercyclical payments: Payments that kick in when the price for a commodity drops below a certain floor. These have been less common as prices have stayed high. These are also likely to be ended.
- Average Crop Revenue Election program: An alternative attempt to streamline to direct and countercyclical payments by guaranteeing minimum revenue per acre. These will likely not be included in the new farm law.
- Marketing loans and loan deficiency payments: With marketing loans, farmers can take out a loan against the value of their crops, and keep the difference if their crop value drops below the value of the loan. Or they can opt for loan deficiency payments, which act as direct payments when prices are low. The loan programs would be retained under the farm bill under consideration.
Between 1995 and 2010, about 88,000 North Dakota farmers received $3.2 billion in crop insurance subsidies.
About 148,000 Minnesota farmers received $2.8 billion in crop insurance subsidies.
- Crop insurance subsidies: Privately administered and publicly subsidized, this compensates farmers for a loss of crop yields or revenue. About 60 percent of premiums are currently paid for by subsidies. Crop insurance is the centerpiece of the new Senate farm bill. More than two-thirds of aid in the bill comes from insurance subsidies.
Between 1995 and 2010, about 88,000 North Dakota farmers received $1.7 billion in disaster payments.
About 148,000 Minnesota farmers received $703 million in disaster payments.
- Disaster payments: Aid that compensates farmers for losses because of storms or other natural disasters is included in the Senate bill.
Between 1995 and 2010, about 88,000 North Dakota farmers received $1.9 billion in conservation payments, the bulk of which is from the Conservation Reserve Program.
About 148,000 Minnesota farmers received $1.8 billion in conservation payments, the bulk of which is from the Conservation Reserve Program.
- Conservation Reserve Program: Pays farmers to leave land for conservation rather than farming it. The program is alive in the new bill, but with some reduction in eligible acres. The new bill also requires farmers to comply with certain conservation standards to be eligible for crop insurance subsidies.