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Group says big profitable operations collect
most farm subsidies
by staff writer
November 30, 2004 Associated Press



MINNEAPOLIS - The biggest and most profitable farms and agribusinesses collected most of the $16.4 billion paid in federal farm subsidies last year, according to a watchdog group.

The recipients included Minnetonka-based Cargill Inc., the nation's largest agricultural company.

Among specific commodity subsidies, corn topped the list in Minnesota, bringing more than $260 million in government money to 51,547 recipients last year. That's twice the amount of soybean subsidies paid in the state, according to the Environmental Working Group, a nonprofit based in Washington.

Minnesota was the nation's sixth-largest recipient of farm subsidies in 2003, dropping from fifth place the year before.

A total of 80,231 recipients, including absentee landowners, collected nearly $781.7 million in payments to Minnesota producers last year, said Ken Cook, president of the group.

The new data show that once again the top 10 percent of producers received most of the subsidies, Cook said.

"It's all tied to one simple thing - how much qualifying land do you own, and how much is grown on that qualifying land," Cook said. "The more you've got, and the higher the yield on that land that's registered with the local USDA office, the more money you get."

Topping the list of Minnesota farm recipients is Oberg Farms Partnership, a family corporation based in Moorhead. Last year, the Obergs collected $646,205 as Ernie and his four sons farmed one of the biggest spreads in Minnesota's Red River Valley - more than 10,000 acres of wheat, corn, soybeans, barley and oats.

From 1995 through 2003, the Obergs collected nearly $4.58 million under various programs as one of the state's leading food producers. They're among the 3 percent of U.S. farmers who account for about half the nation's food production.

Paul DeBriyn, president of AgStar Financial Services, said subsidy data can easily be twisted by critics of farm policy. It only makes sense, he said, that larger volumes of production draw more support.

U.S. consumers should keep in mind that they continue to enjoy some of the world's lowest food costs relative to disposable income, DeBriyn said.

"The American public has got it pretty darn good. We've got the safest, cheapest, highest-quality food in the world," he said.

Cargill collected millions in subsidies from 1995 to 2003. Its turkey business alone was the sixth-largest recipient for 2003, collecting $6.7 million in insurance compensation for losses by avian influenza, or bird flu, Cook said.

Pilgrim's Pride of Virginia also received $11.4 million from that program. Overall, Arkansas-based Riceland Foods, the world's largest miller and marketer of rice, topped the list of companies receiving subsidies with $68.9 million taken in last year.

Nationwide, the $16.4 billion that taxpayers spent on subsidies in 2003 was a 27 percent increase over 2002. Surges in disaster payments and commodity subsidies drove the increase, Cook said.

As Congress begins scrutinizing policy for the 2007 farm bill, Cook hopes his database and analysis will help open the debate. He and DeBriyn said issues of equity, conservation and risk management will be central to the discussions.

Cook and other critics contend that taxpayers are subsidizing mostly large operations that overproduce corn, wheat, soybeans, rice and cotton. The result, they say, is low crop prices.

Only 33 percent of the nation's farmers received subsidies. And of those, 10 percent collected 72 percent of all money that taxpayers provided for conservation, commodity and disaster programs over the past nine years, Cook said.


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