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Harvesting Cash: Working a Farm Subsidy

As Congress prepares to debate a farm bill in 2007, The Washington Post is examining federal agriculture subsidies that grew to more than $25 billion in 2005, despite near-record farm revenue.

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Washington Post Radio (WTWP)

  • Federal Aid Program for Farmers (July 3, 2006)
    The Washington Post's Dan Morgan and Sarah Cohen discuss a little-known farm subsidy program that benefits more than just farmers.

Live Online Transcript

  • Reaping a Cash Crop (July 18, 2006)
    The Washington Post's Dan Morgan, Sarah Cohen and Gilbert M. Gaul respond to readers' comments and questions about the federal farm subsidy program.

Graphics

    Interactive:
  • Raising Cash - This map shows each county that received the payments in the past calendar year and the program's 10 largest recipients in each county, according to payment records obtained by The Washington Post from the U.S. Agriculture Department as of February 2006.
  • The Lowdown - Loan Deficiency Payments are paid to farmers when market prices are low. The program has cost $29 billion since 1998. This graphic shows where the payments went in 2005.
  • Cash for Cows - In 2002 and 2003, the Livestock Compensation Program paid ranchers and dairy farmers based on the size of their herds, not losses. Eligibility was determined based on emergency and disaster declarations in the county. This map shows the total payments made under this program, based on payment records obtained by the U.S. Department of Agriculture in February 2006.
  • Cash Flow - Federally funded crop insurance was supposed to make disaster payments obsolete. But Congress has continued to pass ad-hoc disaster legislation despite more generous insurance benefits. Over the past decade, the benefits have been centered in areas battered by repeated hurricanes, floods and droughts.
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  • Farm Subsidies Over Time - In recent years, farm subsidies have remained high even in years of near-record profits.
  • A Changing Farm Program - Federal farm programs began during the Great Depression, when one-quarter of the U.S. population lived on farms. The programs guaranteed prices by effectively allowing farmers to sell some crops to the federal government when markets were poor. Farmers who participated in the programs were required to limit their production. This graphic shows how the farm programs evolved.
  • Money for Nothing - In 2002, this land in El Campo, Tex., was a rice field. Today, owners of new homes on the land collect farm subsidies on their back yards. One real estate broker refers to the properties as "cowboy starter kits."
  • Making the Most of a Subsidy - The federal government has guaranteed minimum prices, or floors, to farmers for generations. Loan deficiency payments, created in 1985, have become the largest component of that guarantee. The subsidies–available for major commodity crops including corn, wheat, cotton and soybeans–can vary each day for each crop in each county where it is produced. Here is how the LDP works, based on market conditions and estimates for corn published by the U.S. Agriculture Department last year for the Eastern Shore of Maryland.
  • From Loans to Loan Deficiency Payments - Comparing the old farm subsidy system to the loan deficiency payment system.
  • Cash for Corn - After Hurricane Katrina caused a brief dip in Midwest corn markets, farmers across the country were able to claim loan deficiency payments, whether or not they sold their corn at the distressed prices.
  • A Government-Surplus Dairy Detour - How powdered milk got shipped around the world.
  • Company Gains, Taxpayer Losses - The 16 companies that sell federal crop insurance policies share the risk with the federal government. But as part of the arrangement, the companies are allowed to shift most of their high-risk customers to the government. In good years, that translates to large profits for the companies.
  • Taking on Big Milk - For three years, starting in 2003, a coalition of milk companies and dairies lobbied to crush an initiative by a maverick Arizona dairyman. Hein Hettinga chose to work outside the rigid system that has controlled U.S. milk production for almost 70 years. The milk lobby said he presented unfair competition because he chose to operate without federal price control. Hettinga fought back but was outgunned on the Hill. In March, Congress passed a bill that effectively ended his experiment.
  • The Changing Family Farm - Many American family farms have been transformed from small, self-contained businesses to complex enterprises. That change has been helped along by government agricultural payments that guarantee crop prices or prop up farmers' incomes - payments that increasingly go to the largest farms.
  • Reaping and Sowing - More than 180,000 farms received at least $25,000 last year in the core programs that Congress will consider in the 2006 Farm Bill. These farms are concentrated in six states, but most congressional districts have at least a few of these large operations.

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