U.S. subsidy a profitable 'crop' for some farms

Monday, December 17, 2001

JEFFERSON CITY, Mo. -- Despite the variety of crops grown on Missouri's 109,000 farms, the most profitable is the annual federal subsidy that provides more cash than any of the major row-crop products sold.

Missouri farmers' total crop and livestock income last year reached $4.6 billion, with $2.7 billion coming from the sale of livestock and animal products and $1.9 billion coming from a large variety of row crops, such as corn, wheat, soybeans, cotton and rice.

Row-crop subsidies paid to the state's farmers in the federal fiscal year just ended totaled $872.98 million, or 19 percent of Missouri's total agricultural production receipts last year. No statistics are yet available for the 2001 crop year.

The federal subsidy is greater than the receipts from either of the state's two most profitable crops, soybeans and corn. Soybean sales last year reached $755 million; corn sales reached $524.1 million.

Since 1996, Missouri's row-crop farmers have received a total of $2.58 billion in federal subsidies, the largest of any five-year state total since the beginning of the program in the 1930s. Missouri ranks 10th among farm states in subsidies paid since 1996, some $4.1 billion less than first-ranking Iowa but two slots ahead of California's $2.2 billion. Most of the Missouri's neighboring states -- Iowa, Illinois, Kansas, Nebraska and Arkansas -- received higher subsidy totals from 1996 through 2000.

Few farms get money

Federal subsidies go primarily to farmers producing corn, soybeans and wheat, with two-thirds of these payments going to 10 percent of the nation's farm operations. The current program, now targeted for criticism by several industries, leaves 60 percent of the nation's farmers and ranchers without any assistance from Washington.

According to a spokesman for the Missouri Department of Agriculture, only a relatively small number of the state's livestock producers qualify for any kind of federal payments. The exceptions are those who take part in relatively small soil conservation projects and related programs such as water purification and drainage programs. They receive no compensation for any losses they may have experienced in raising and marketing livestock or animal products.

In contrast, the state's largest subsidy recipient, Missouri Delta Farms of Parma, Mo., has received $14.98 million in U.S. Treasury checks from 1996 to 2000. The New Madrid County-area operation includes several Bootheel farms with a single corporate name.

In addition to cattle and hog farmers, numerous small row-crop producers are also ineligible for subsidy payments. Numerous truck farming products, such as watermelons, apples, peaches, grapes and vegetables, also do not qualify for subsidy assistance.

Subsidy amounts have contributed to lower and lower prices consumers pay for food and farm-grown products. Americans now pay only 12 percent of their income for food, compared to 22 percent five decades ago.

Whether subsidies stimulate crop overproduction is still a matter of debate.

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