Fat-cat farmers who presumably need help the least still get the bulk of the benefits from federal farm commodity support programs, according to a new study by U.S. Department of Agriculture economists.
The study of direct payments made in 1978 found that almost half of the $2 billion paid out went to the largest 10 percent of farms taking part in the various USDA support programs.
Farmers with less than 70 crop acres got average direct payments of $363, while farmers with more than 2,500 acres got an average of $36,005 in federal subsidies. Farmers with less than 500 acres were classified as small; farmers with more than 500 were deemed to be large.
USDA's study, confirming long-held beliefs that the biggest benefit most, comes at a time when congressional conferees are wrapping up work on a new farm bill that does not deal with imbalances in the federal support programs.
Basic reforms in the support programs were strongly recommended in a structures-of-agriculture study released by then-USDA secretary Bob Bergland just before he left office in January.
The Reagan administration has carefully avoided dealing with the Bergland proposals for changes, but did propose, with no success, the elimination of target price payments--direct subsidies--to farmers. The Agriculture committees of the House and Senate, however, have resisted that as well as other alterations of the support systems.
One area of apparently clear abuse found by the new study was limitations on payments to individual farmers. The study found that payment limits of $40,000 were circumvented in at least 279 cases because of loopholes in the 1977 law. Of the 279, another 52 farms collected more than $100,000 each.
The law provided that payment limits would apply only to "persons." Farms operated as corporations would be free to receive more than the $40,000 limit.
The payment limits and language remain unchanged in the new bill being worked out by the conferees. Several efforts to lower the limits and revise the support-payment programs were defeated on floor votes before the measures went to conference.
James Johnson, one of three authors of the USDA study, said there was little evidence that tougher restrictions on payment levels would result in a more even distribution of benefits to small farmers. The study also held that the direct-payment programs, contrary to another widespread belief, have not accelerated nonfarmer investment in agricultural production.
Data collected by USDA showed that the largest farmers collected 66 percent of cotton program payments, 53 percent of wheat payments, 48 percent of rice payments and 41 percent of feed grain (corn, sorghum, barley) payments. Only about a third of the nation's 2.4 million farmers participated in the programs.
Programs and 1978 costs covered by the study were deficiency payments (on target prices), $1 billion; voluntary diversions, $633 million; disaster payments, $356 million; haying and grazing, $15 million.