Giant farms cash in on subsidies

WASHINGTON -- A Florida real estate developer, Texas' massive King Ranch and dozens of other giant farms are cashing in on a program created last year to bypass payment limits on federal subsidies for grain, cotton and other crops.

Maurice Wilder, a Clearwater, Fla., developer who controls 130,000 acres of farm and ranch land in eight states, has collected $1.2 million in benefits to himself and his company, the Wilder Corp., according to records obtained by The Associated Press under the Freedom of Information Act.

The normal limit on subsidies that any individual or company can receive is $150,000.

King Ranch Inc., a Houston-based company that owns 825,000 acres, got more than $638,000 under the program, according the Agriculture Department records.In South Dakota, a beekeeper collected $280,000 in subsidies for his honey.

"It's almost a must in the agriculture business today to get some government support. I think it's a good deal," said Wilder, who owns a series of office buildings and mobile home parks in addition to farm holdings spread from Indiana west to Colorado and Texas.

King Ranch, which is owned by descendants of 19th-century founder Richard King, raises 60,000 cattle, grows cotton and grain, and controls citrus and sugar interests in Florida.

The company, which also has income from tourism, leather goods and oil and gas royalties, has until now avoided taking federal subsidies.

"Frankly, the payments are limited in size. They require a lot of financial disclosure that we don't want to go through," said Jack Hunt, the company's president.

Action on farm bill

The House is expected to consider imposing a strict $150,000 cap on all crop-based subsidies when it takes up a major farm bill this week.

The program works this way: A farmer takes out a loan on a crop at the government's price-support rate and then pays back the loan at the local market price. So a farmer could borrow $500,000 on a crop worth $300,000 and pocket the $200,000 difference. It's known as a "certificate" program, although no such paper changes hand; the transactions are done by computer.

A wide variety of commodities are eligible, including corn, cotton, rice, sorghum, barley and soybeans. The bulk of the money paid out on the 2000 harvest -- $280.5 million -- went to rice and cotton interests.

Two large rice-grower cooperatives in Arkansas collected nearly $150 million between them.

Supporters of the program say the normal payment limits are too low. At last year's market prices, an 850-acre cotton farm and a 6,000-acre soybean farm would have reached the $150,000 payment limit.

But critics say the program subsidizes excess production of surplus commodities, further driving down market prices, and encourages the expansion of large farms to the detriment of their smaller neighbors.

"That's hard to see how that serves the public good," said Chuck Hassebrook of the Center for Rural Affairs, a Nebraska-based activist group that opposed the program. "The single most effective thing Congress could do to strengthen family farming is to stop subsidizing mega farms."

Federal farm assistance already was skewed to large grain and cotton farms.

Two-thirds of the $27 billion provided through other programs last year went to 10 percent of farm owners, the AP found.