Posted on 02/18/2005 2:06:44 PM PST by Coleus
Urban 'farmers' reap benefits of subsidies
Even though he lives in a city that has 17,857 people per square mile and actually drives a truck for a living, Donald Jacobs, 65, of Paterson, is a farmer, according to the federal government.
Because he is a farmer, Jacobs receives a subsidy each year from the U.S. Department of Agriculture for the crops he hires someone to plant on 13 acres he owns in Salem County.
President Bush's 2006 budget takes aim at farm subsidies, proposing to cut all crop and dairy payments by 5 percent and limit the total per-farmer payout to $260,000. If approved, the changes would cut $587 million from the 2006 budget, and about $360 from Jacobs' pocket, or just enough to pay the taxes on his land.
"It wouldn't be a huge impact for me, but it is the difference between paying the taxes on the land and not paying them," Jacobs said. New Jersey's tax abatement program for farmers has kept his property taxes low.
Jacobs qualifies for federal subsidies, according to the letter of the law, but he's a poster child for a debate that has heated up since Bush's budget was released last week: Because he doesn't make a living by farming, should Jacobs and others like him get financial help? He received $2,281 between 1995 and 2003. He pays the taxes on the land and takes the profits.
In fact, 100 "farmers" in Passaic County received some sort of subsidy from the USDA between 1995 and 2003. Payouts ranged from $138,078 given to Alfred Schultheis of Clifton to $3.11 awarded to Jason Mays of Paterson, according to the USDA. None of the 100 farmed where they lived and only three had land in the state that's known more for its gardens than farms. In some cases, more than one person received a subsidy for the same piece of land.
The subsidy program dates back to the mid-1930s and has grown by leaps and bounds. Farmers can receive money to make up the difference between market and demand for their crop, to help rebuild after a bad year and to plow under part of their fields to help drive up demand.
Created to benefit small farmers when they made up the bulk of the nation's economy, the program now helps 1.3 million mostly part-time farmers who rely on off-farm earnings for most of their income, or giant corporate farms that use the subsidy to boost profits, critics say. Farm residents account for less than 2 percent of the U.S. population, yet the USDA expects to pay out $24 billion in subsidies in 2005. Nationwide, two-thirds of the nation's farmers receive no subsidy.
A June 2004 report from the U.S. General Accounting Office, the watchdog for federal government operations, found that just about anybody who wanted a farm subsidy could get one. A review of subsidies awarded in 2001 found that in about half the cases, the USDA failed to determine whether the person applying was actively involved in farming, according to the GAO report.
The Environmental Working Group, which is devoted to subsidy reform, produces a database each year with information from the USDA on who gets money. Spokeswoman Elizabeth Moore said the USDA is wasting taxpayers' money with its lax oversight. The group supports the Bush administration's proposal to limit payouts.
"Land that contains subsidy-eligible crops is very valuable, and it's easier for a wealthy person to purchase it than it is for a small farmer," Moore said. "This system actually helps drive out small farmers, rather than helping them."
Ted Kosko of Little Falls is a high school teacher who received $7,865 in subsidies last year for 160 acres he owns in Missouri. He bought the land about six years ago and has never seen it. At that time, the farm was one year into a 10-year USDA conservation program that pays farmers not to plant.
His brother-in-law, who works in farmland real estate, suggested that the parcel would be a good investment. Given the instability of the stock market, and the rising value of land in that area, his brother-in-law was right, Kosko said. The fact that Kosko benefits financially from a program that's meant to help full-time farmers isn't his problem. He's obeying the letter of the law. He's also not guaranteed financial gains.
"Whether I owned it or anybody else owned it, it was still in the program and had to stay that way for nine more years," Kosko said. "And if crop prices had gone up, I would've still had to stay in the conservation program and I would've lost money."
The New Jersey Farm Bureau strongly opposes Bush's plan to reduce subsidies, said Ed Wengryn, a field representative for the bureau. People like Kosko and Jacobs aren't trying to abuse the subsidy system, he says, as long as a farmer down the line is able to stay in business.
"The man who's farming the land in Salem County is getting paid by the landowner to do the work," Wengryn said.
"The landowner helps pay for that work with the subsidy. While it may not be the most direct way, there's still a farmer in Salem County who's able to stay in business. You can't change the rules to catch the percentage that you think is going to the wrong place without hurting the people who need help. Without those payments, whole rural economies will go bankrupt. Period."
Darn.
Good for New Jersey!
New Jersey gets less than 60 cents back from the federal government for every dollar it sends in. If some citizens found a way to hop on the gravy train that keeps Mississippi, West Virginia, Arkansas, and Kansas so fat and happy on NJ money they should be commended for their good work.
I have a garden. I wouldn't even be able to begin to think how to pull off something like that.
Read later ping.
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