By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
None of this was supposed to happen. In 1996, President Bill Clinton signed what was known as the "Freedom to Farm" bill. Over the course of the next seven years, it was supposed to wean farmers from taxpayer handouts. But thanks to a number of factors -- bumper crops, stumbling international markets, among a host of others -- the opposite has happened. Today, nearing the end of that seven years, taxpayers are paying more money than ever to farmers.
According to the 1996 law, by 2001, farmers were supposed to be getting a total of about $5 billion in subsidies. Instead, every year, Congress has written a ledger's worth of emergency checks. The result: Last year American farmers received more than $20 billion in subsidies. In all, since 1996, the government has spent three times the amount of money on farm subsidies than it planned on spending. Today farmers get about half of their net income from government support assistance.
Crucial to understanding the state of farming in this country is also understanding what, exactly, makes a farmer. Finding the right definition speaks directly to Hoag's question of who farm subsidies really are for: crops or farmers? The definition is especially important, because it seems as though farm assistance programs have less than ever to do with actual food.
At one time, government subsidies might have made sense as necessary to protect the country's food supply. Yet it's hard to make that case now. The fact is, most agricultural products don't get direct subsidies. And as economics columnist Robert Samuelson pointed out in a recent Newsweek essay, "Has anyone noticed shortages of chicken, lettuce, carrots or bacon?"
So that leaves the farmers as the main reason for the existence of subsidies. But what, exactly, is an American farmer in 2002?
Hoag, the CSU agricultural economist, has tried to figure it out -- and he concludes that it's probably not what you think. Consider these statistics: Three percent of farmers produce about half of all agricultural sales. Taking it from the opposite direction, 85 percent of all farmers produce only about 20 percent of sales.
But at what point does a farmer stop actually being a farmer? According to Hoag's research, of that 85 percent of the country's smallest farms, three-quarters lose money, an average of $3,400 per farm per year.
Yet, he continues, this same group's off-farm income runs about $43,000 a year -- more than that of your average non-farming American. These people's net worth, he adds, is about $245,000, higher than that of non-farmers. "About 90 percent have off-farm jobs" from which they make their primary income, Hoag explains.
Hoag's conclusion: "They really are not farmers," he says. "They are people who farm for a second income." And, he notes, that is probably not who most taxpayers envision when they think about supporting farmers with subsidies.
"Like a Denver engineer who goes out and buys 35 acres in Kiowa County and joins the 4-H," notes Hoag. "Personally, I don't want to support these people."
Farmers living along the Front Range urban corridor -- Denver, Colorado Springs, Boulder and Fort Collins -- took in about $66 million in farm subsidies between 1996 and 2000. In a way, it's not surprising: Traditionally, fortunes in the West have often sprung from the land. Think oil, ranching, mining. Even today, big land often goes hand in hand with big money: Tycoons like their space, and many wealthy city-dwelling Coloradans like to have a spread to call their own. Billionaire Phil Anschutz made his pile in railroads, entertainment and communications, but he maintains a huge preserve in Weld County because, well, he can.
And many Denver-based farmers are the genuine article: large agricultural concerns that have installed their headquarters in the big city. Still, the combination of urban and rural can make for a wide assortment of hybrid farmers. For example, old land barons who've since moved on to other interests -- though not left their subsidies behind entirely.
Monfort Inc., for instance, has received about $50,000 over the past five years for land it owns in Larimer County. And the Cannon Land Co., controlled by local manufacturing titans the Gates family, has picked up $105,000 in taxpayer support.
The owners of the Boulder County-based Caribou Ranch made a name as big-time music producers of bands like Blood, Sweat and Tears and Chicago; many other famous groups recorded music at the ranch as well. Yet Caribou has also received about $200,000 in farm subsidies since 1996, mostly for land in Yuma County. Members of the Aspen-dwelling Walton family, developers of the Crested Butte ski area, collected a little more than $30,000 for property owned in Missouri. In the scheme of things, it's not much money. But it's worth asking if the companies need it at all.
Other urban Westerners grew up in the boonies and then made their marks in the city. (Roy Romer and Hank Brown are a couple of fine examples.) The farm was left behind years ago -- but not necessarily the subsidy payments.
Sam Mersfelder grew up on a farm in Kit Carson County. But after graduating from veterinary school in Fort Collins in 1972, he decided to stay along the Front Range. In a stroke of economic good fortune, he situated his clinic near the Denver Tech Center before real-estate prices soared out of reach.