When Farm Subsidies Go Bad

The Washington Post finds that the government has paid over $1.3 billion in agricultural subsidies to non-farmers, under a decades-old policy intended to eliminate subsidies. The policies are changing land use patterns in the Farm Belt.
July 3, 2006, 1pm PDT | Chris Steins | @urbaninsight
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"The checks to Matthews and other landowners were intended 10 years ago as a first step toward eventually eliminating costly, decades-old farm subsidies. Instead, the payments have grown into an even larger subsidy that benefits millionaire landowners, foreign speculators and absentee landlords, as well as farmers.

...The payments now account for nearly half of the nation's expanding agricultural subsidy system, a complex web that has little basis in fairness or efficiency. What began in the 1930s as a limited safety net for working farmers has swollen into a far-flung infrastructure of entitlements that has cost $172 billion over the past decade. In 2005 alone, when pretax farm profits were at a near-record $72 billion, the federal government handed out more than $25 billion in aid, almost 50 percent more than the amount it pays to families receiving welfare.

The Post's nine-month investigation found farm subsidy programs that have become so all-encompassing and generous that they have taken much of the risk out of farming for the increasingly wealthy individuals who dominate it.

...Gary Underwood, director of agricultural appraisals for sprawling Harris County, which includes Houston, said owners are building $500,000 houses on old rice fields and qualifying for tax breaks.

He singled out one tract where the owner built a 4,000-square-foot single-story house on five acres in Katy, a booming suburb. The house sits on one acre. The other four acres get a tax break and a farm payment. 'I can't touch him,' Underwood said."

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Published on Sunday, July 2, 2006 in The Washington Post
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