Harvesting Cash The Myth of the Small Farmer

Federal Subsidies Turn Farms Into Big Business

Thomas Oswald stays out of the land-grab game.
Thomas Oswald stays out of the land-grab game. "I want to be known as someone who farms well as opposed to farming big," he said. (By Gilbert M. Gaul -- The Washington Post)

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By Gilbert M. Gaul, Sarah Cohen and Dan Morgan
Washington Post Staff Writers
Thursday, December 21, 2006

The cornerstone of the multibillion-dollar system of federal farm subsidies is an iconic image of the struggling family farmer: small, powerless against Mother Nature, tied to the land by blood.

Without generous government help, farm-state politicians say, thousands of these hardworking families would fail, threatening the nation's abundant food supply.

"In today's fast-paced, interconnected world, there are few industries where sons and daughters can work side-by-side with moms and dads, grandmas and grandpas," Rep. Jerry Moran (R-Kan.) said last year. "But we still find that today in agriculture. . . . It is a celebration of what too many in our country have forgotten, an endangered way of life that we must work each and every day to preserve."

This imagery secures billions annually in what one grower called "empathy payments" for farmers. But it is misleading.

Today, most of the nation's food is produced by modern family farms that are large operations using state-of-the-art computers, marketing consultants and technologies that cut labor, time and costs. The owners are frequently college graduates who are as comfortable with a spreadsheet as with a tractor. They cover more acres and produce more crops with fewer workers than ever before.

The very policies touted by Congress as a way to save small family farms are instead helping to accelerate their demise, economists, analysts and farmers say. That's because owners of large farms receive the largest share of government subsidies. They often use the money to acquire more land, pushing aside small and medium-size farms as well as young farmers starting out.

"Historically, when you think of family farms, you think of Mom and Dad and three generations working a small or mid-sized farm. It gives you a warm and fuzzy feeling," said Alex White, a professor of agricultural economics at Virginia Tech. "In the real world, it might be a mid-sized farm. But it also might be a huge farm. It might be a corporation."

Large family farms, defined as those with revenue of more than $250,000, account for nearly 60 percent of all agricultural production but just 7 percent of all farms. They receive more than 54 percent of government subsidies. And their share of federal payments is growing -- more than doubling over the past decade for the biggest farms.

Two farms help to tell the tale.

John Phipps of Chrisman, Ill., harvested nearly 170,000 bushels of corn and soybeans last year on two square miles of fertile soil. He grossed nearly $500,000, putting his farm in the nation's top 3 percent. Still, he received $120,000 in subsidies.

"It's embarrassing," Phipps said. "My government is basically saying I am incompetent and need help."

Several hundred miles northwest, Thomas Oswald farms the same Iowa fields that his relatives worked more than a century ago. The land he rents is about one-third the size of Phipps's, and Oswald's subsidies are much smaller. Oswald contends that federal payments are helping to fuel a spike in land prices that favors the wealthy.


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© 2006 The Washington Post Company

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