“The unintended consequences of a government program are usually greater than the intended consequences.” Unknown origin.
Have you ever wondered what the US Farm Bill looks like to an individual farmer? We signed up our farm for the 2009 growing season. I wanted to get on my high-horse and opt-out; but my parents talked me into taking the “free” government money. When I hear farmers griping about “welfare moms” taking government hand-outs I can usually change the conversation with a simple question. “How much is your government payment?”
The 2008 Farm Bill is on the books. It covers the 2009 through 2012 growing seasons. According to the “Wisconsin Agriculturist”, the 2008 Farm Bill works out to $189 billion for domestic nutrition programs and $102 billion direct support for farmers. The direct farmer support can be further broken down into $42 billion for commodity crops, $24 billion for conservation, $22 billion for crop insurance, and $14 billion for supplemental disaster assistance, trade, horticulture and livestock production, rural development, research, forestry, energy, and other programs.
With $10 billion in offsets from tax provisions the direct farmer support is reduced to $92 billion, or about $18.4 billion per year. That works out to about $60 for every American. What are you getting for your $60?
An excellent informational resource is 2008 Farm Bill Side-by-Side.
Eligible commodities are wheat, corn, grain sorghum, barley, oats, upland cotton, rice, peanuts, soybeans, other oilseeds, and pulse crops. Payment rates are found in the previous link.
What entitles a farmer to receive a direct government payment? Eligible producers share in the risk of producing a crop on base acres on a farm enrolled in DCP; annually report the use of the farm’s cropland acreage; comply with conservation and wetland protection requirements on all of their land; comply with planting flexibility requirements; use the base acres for agricultural or related activities; and protect all base acres from erosion, including providing sufficient cover as determined necessary by the county Farm Service Agency committee, and control weeds.
That all sounds great, except I know of no farmer that has had their farm checked for these provisions.
Our direct government payment for 2009 is $3,552. How is this determined?
The direct government payment is based on the historical production of a farm. This is an average record of the various crops and acres planted to each crop. The USDA refers to this as “base acres”.
The base acres are then multiplied by 83.3% to get your payment acres. This has been reduced from 85% in the previous farm bill.
Your payment acres are then multiplied by the historical county yield to calculate yield per acre in bushels.
Bushels are then multiplied by the payment rate to determine the direct annual payment in dollars.
Here is what our farm looks like:
|Commodity||Base Acres||Payment Ac.||Yield||Pay rate||Direct pay|
The strange thing about this is we don’t have to grow these crops to receive the payment. All we have to do is own or rent the base acres. Farmers look at the expected government payment when valuing land. An unintended consequence of the US Farm Bill is raising the value of farmland.
Another strange thing is the pay rate. This seems to be based on the strength of commodity lobbyists. Look at barley and oats. On our farm these two crops are managed the same. Their effect on the soil is virtually the same. Why is their payment rate so different? The only reason I can guess is that the barley lobby is more powerful than the oat lobby.
We have over 100 acres of hay. Why isn’t there a payment for this commodity?
The strangest thing of all is we don’t know why we receive this money. We are long-term stewards of the land. We don’t do anything differently based on the government program. All it costs us is a couple hours of paperwork.
The most recent statistic I saw was from 2002. Only one third of farms received a government payment. Most of the farms that received a government payment received substantially more than $3500. If anyone knows of more recent statistics, please comment.