Minnesota’s most-subsidized farmers

Posted on April 29th, 2008 – 10:40 AM
By James Shiffer

cornfield.jpgThe database of farm subsidies maintained by the Environmental Working Group is one of the most powerful uses of public records ever, and it has changed the way people think about Washington’s enormous pipeline of money to rural America. This month, the EWG presented its analysis of 2006 farm subsidies from the U.S. Department of Agriculture. It’s just in time for the debate over the Farm Bill raging on Capitol Hill. House and Senate negotiators are trying to reach agreement, with subsidies to the richest farmers one of the main sticking points.

Minnesota, home to House Agriculture Chairman Collin Peterson, ranks fifth in the nation in its share of the $177 billion in cumulative farm subsidies from 1995 to 2006. That amounts to $10 billion for Minnesota alone during that time, although booming farm income meant Minnesota’s 2006 government harvest of $740 million is a sharp drop from the previous year’s $1.3 billion. Most of the subsidies are commodity payments to, in the Environmental Working Group’s words, “prop up” farmers’ incomes.

Here are the top 2006 recipients of farm subsidies in Minnesota:
1 Hader Farms Partnership, Zumbrota, $534,648
2 Flywheel Grain Partnership, Trail, $482,125
3 Hector Farms II Partnership, Hector, $456,111
4 Harvest States Cooperatives, Saint Paul, $425,731
5 Oberg Farms Prtshp, Moorhead, $371,705
6 University Of Minnesota, Lamberton, $365,348
7 Molitor Bros Farm, Cannon Falls, $324,211
8 Sanders Farms, Truman, $304,028
9 Far Gaze Farms, Northfield, $297,476
10 Roy Olson Partnership, Parkers Prairie, $281,176
11 Kramer Farms, Hector, $264,347
12 Marthaler Farms Partnership, Osakis, $264,100
13 Jetn Enterprises, Hawley, $261,361
14 The Nature Conservancy, Minneapolis, $256,051
15 Duncanson Growers, Mapleton, $239,122
16 Goeman Brothers, Jeffers, $234,606
17 L & B Theis Farms, Shakopee, $234,216
18 Sunset Farms Of Freeborn County, Albert Lea, $230,299
19 Armstrong Family Farms, West Concord, $222,658
20 Four K Farms Ptshp, Morris, $222,432

The most subsidized company in the nation from 1995 to 2006 was Riceland Inc of Stuttgart, Arkansas, which raked in $554 million from the government. Coming in at No. 4 was Harvest States Cooperatives in Inver Grove Heights, with $49 million in subsidies over those years. UPDATE: The Fortune 500 company, now known as CHS, doesn’t keep any of the money but has an arrangement with USDA in which it’s merely a pass-through for payments to farmers, a company official informed me today. The company has unsuccessfully complained to the Environmental Working Group in an effort to remove its name from the list.

Last year, my colleagues Matt McKinney and Glenn Howatt reported on the urban dwellers who were collecting the rural subsidies.

A separate database from the Environmental Working Group unveiled last summer really names names: identifying individuals and organizations who were the top recipients of federal crop subsidies from 2003 to 2005.

Here they are:
1 University Of Minnesota, Lamberton, MN 56152 $749,513
2 Members Of Big Stone Farmer Coop, Graceville, MN 56240 $580,273
3 Michael Scott Stamer, Willmar, MN 56201 $561,501
4 Members Of Lismore Colony, Clinton, MN 56225 $536,616
5 Cole Pestorious, Albert Lea, MN 56007 $516,384
6 Keith Tordsen, Round Lake, MN 56167 $494,966
7 Norman Giese, Appleton, MN 56208 $474,580
8 Phillip Ivan Kvam, Willmar, MN 56201 $461,684
9 John E Nelson, Hanska, MN 56041 $432,121
10 Paul J Beskau, Hastings, MN 55033 $424,443

Just so you know, the United States isn’t alone is subsidizing its farmers. Check out an ambitious project to track European farm subsidies, country by country.

32 Responses to "Minnesota’s most-subsidized farmers"

NMTwinner says:

April 29th, 2008 at 12:14 pm

Listening to Bush excoriate farm subsidies this morning nauseated me when I compared it with his attitudes toward subsidies of big oil. Although I have no doubt farm subsidies should be revisited, it is clear that Bush is and always has been in the pocket of the oil companies!

Kevin in Dallas says:

April 29th, 2008 at 12:17 pm

These farmers aren’t “evil”, they’re just playing the game. But it’s clearly time to change the game. “Family farms” are disappearing, and corporate farms shouldn’t get subsidies in the long term. Don’t cut it off all at once, but it’s time to start weaning the farmer from the drug.

J says:

April 29th, 2008 at 12:36 pm

Come on Washington. With grain prices at record high levels this is outrageous. This subsidy costs close to $200 from each Minnesota resident per year. Imagine the progress that would be made if all of these funds were applied to Minnesota road improvments and our schools.

Robert Grant says:

April 29th, 2008 at 12:39 pm

Hello James,

Could you publish our MN politicians per diem meal money, car allowance, mileage allowance, insurance allowances, air fare allowances, and salaries?

Thanks

Gianna DaGiau says:

April 29th, 2008 at 12:42 pm

This greatly decreases the ability of farmers in poor countries to sell their food at competitive prices. Without those sales, they do not have the income to invest in their farms to grow more food to cover low yield years. This adds to hunger crises, country destablization and can impact our national security. We donate food on the front end and take it away on the back end. I would like to see an analysis published of the impact of ending these subsidies on our nation’s food security, vs. investing those same funds in health care, education, and other things important to Americans.

William says:

April 29th, 2008 at 12:48 pm

I’ve seen this before, and it seems we’ve gone a little beyond “propping up” the family farmer. But I can’t blame the farmers. The politicians refuse to let the farm economy normalize because it’s easy to buy office by giving other people’s money to special interests. Now we’re building a phony ethenal business because it’s good for midwestern farmers/politicians.

I kind of agree with Robert Grant- let’s see who else is on the gravy train. Let’s see an honest audit of our school districts and government agencies. The name of game these days is get both hands in the trough and don’t relent.

Then people seem to wonder why there’s apparently no money for legitimate government functions such as road building.

Kathy Bremer says:

April 29th, 2008 at 12:55 pm

You need to also do a story on how government policies have for many years kept the price of food down for the American consumer. These same policies have also kept the price that farmers receive for their corn artificially low – thus, making farm subsidies necessary.

No – I am not from a farm family. Just someone who does not like it when the media only chooses to report one side of the story.

Ed Johnson says:

April 29th, 2008 at 12:56 pm

Harvest States isn’t recieving the subsidy it’s LDP paid to the farmer from grain stored at the elevator. This is misleading and should be explained before it’s published.

Al says:

April 29th, 2008 at 1:00 pm

How does the average middle class worker get in on these subsidies?

No help says:

April 29th, 2008 at 1:19 pm

Lots of numbers with no context.

Dave21 says:

April 29th, 2008 at 1:22 pm

R Grant. Good point.

I would like to see the families who receive the most welfare. A couple of years ago the Mpls paper ran a story on two Mpls families who have received 100′s of thousands of dollars of free money from the taxpayers.

Lani Jordan says:

April 29th, 2008 at 2:15 pm

I want to make you aware of an inaccuracy in the report on farm subsidy payments you included in your WhistleBlower blog today.

The report lists Harvest States Cooperatives of St. Paul (which, by the way, has been CHS Inc. for almost 10 years now) as the fourth largest payment recipients. This is very inaccurate.

CHS (formerly Harvest States) itself is NOT a recipient. Instead, the compapny acts as a Cooperative Marketing Association (CMA) and passes the payments directly and quickly to producers as a way of streamlining the Commodity Credit Services programs. This is a “co-op only” program CHS can offer to streamline paperwork and get money to farmers faster. It’s an agreement reached with USDA for handling payments. Producers and elevators who participate in the CMA program are not listed individually as recipients because the funds flow through CHS. CHS does not retain these funds and actually saves the government money.

Cover all sides says:

April 29th, 2008 at 2:20 pm

Robert Grant, Kathy Bremer, and NMT Winner brought up good points. When most people read this, they think all farmers are benefiting from these subsidies. This isn’t the case. Smaller farms are barely getting by. They are being bought up or pushed out of business by the corporate farms. It’s the larger farms or farmers that need to be taken off of those subsidies.
There are so many things that aren’t discussed in this article. The price of machinery – do most people know that a single tractor (mid size – not a large four wheel drive) is still at a minimum $80,000.00 – $100,000.00? What about the equipment that it pulls? Plows, planters, etc.? They are all expensive. Add in the desiel fuel -which is what – $4.00 a gallon? It costs a couple hundred dollars alone to fill a tractor. Most small farmers have at least 2 if not 3 tractors (most vary in size, some small, and some large – depending on the type of equipemnt they are pulling). Add in harvesters – you could easily be looking at close to a million in loans for machinery. Most small farmers only farm about 1200 – 2000 acres of land. That’s peanuts compared to the larger farmers or corporations(such as Offut’s or Oberg’s). After operating expenses and loans, most small farmers are taking in what most average American’s are – in the neighborhood of $30,000 – $50,000.00.
They speak of the record years for profit the past few years. What about all those that weren’t? The past year or two have been the highest in the past 30 years. There have been a number of years that farmers were lucky to get what famerers were paid during the depression per bushel for a lot of the crops.
I realize that these stories are limited in what they can fit in, but to be responsible journalists, they need to do a series, and cover all sides of these stories so people can get a fll and accurate representation of what is going on.
Now – before anyone starts flaming me, I grew up on a farm, used to be a news producer, and now work for a consumer goods company. I’ve seen things from where they begin to where they end. Both sides have valid points – but, people need to see all sides, and just because there have been a couple of good years, people seem to forget that there are many more that are not. They’ve never had profits to the extent that oil companies have the past couple of years (billions of dollars). The president made what – $900,000.00 last year? Most middle class Americans only make what – $40,000.00 to $80,000.00? He’s not going to see a dent in his lifestyle or any hardships when it comes time to pay $3.50 – $4.00 a gallon at the pump. What is He and Congress doing to help (Has someone even asked that question on air and gotten an answer???)
I challenge all of the news outlets to take a step back and look at the big picture in an unbiased light.

Farm Kid says:

April 29th, 2008 at 2:46 pm

Al – You wanna know how to get a piece of the action? Go purchase some extremely high priced farm land, pay exorbitant prices for your inputs (fertilizer, seed, chemicals, fuel, etc.), plant your crops and then hope & pray that the weather cooperates. If you’re lucky, & the price is decent at harvest time, hopefully you’ll be able to cover all of your expenses & realize a profit. And by the way, this IS your only job — no off-farm job income.

I love the sensationalism of this particular story & the lack of details given so people are automatically drawn to jump to conclusions. Great reporting! Why doesn’t Mr. Schiffer supply some actual details / numbers so folks can get an idea of the complete picture? Anyone care to guess at how many acres are actually being farmed by these folks listed above? Anyone care to figure out how much it actually COSTS to produce a bushel of corn or soybeans or any other crop? Sorry for the vent, but I’m really sick & tired of the public these days jumping all over the “rich farmers” when nobody bothers to look beyond the surface information doled out in these articles. It’s frustrating……and folks don’t worry, when this high commodity bubble bursts, you’ll see lots of folks hurting………

A Proud Farmers Daughter! says:

April 29th, 2008 at 2:51 pm

This article should be explained better! The subsidy is an actual loan that is repaid when the crop is stored. The actual crop has a lien against it and is verified and measured by the US Ag Service. An example of this would be in 2006 the government may have loaned the farmer a $ 1.75 bushel for corn, which helped them maintain their operation. When the farmer sold their corn for $ 1.85 – the repaid the $ 1.75 – and were able to keep $.10 bushel.

Unfortunately, articles like this do not fully explain the entire picture such as how much is spent for the seed, fertilizer, pesticides, and DIESEL fuel to run the machinery. Better yet, look into the cost the machinery to harvest or plant. The average cost of combine (the machine that harvests the crop) costs just as much as a house in the suburbs… Over $ 200K perhaps even more.

You need to keep in mind some the names on this list are actual Family Farms, which are 3-4 man operations.

The subsidy is not different than the loans and tax cuts made for corporate America…such as Northwest Airlines.

So, next time you are eating that thick T-Bone steak or Ribeye… you may want to thank the Minnesota Farmer that grew the corn to feed the steer from which you are eating the meat of…

Yes I am from the farm!

Naturally says:

April 29th, 2008 at 5:06 pm

So why does the Nature Conservancyo Minneapolis get to collect $256,051 from the taxpayers? This is a rump non-profit that lives off of taxpayer dollars.

I don’t support the radical political goals of this group and resent having my tax dollars support it.

SusanLynnJ says:

April 29th, 2008 at 5:51 pm

Sorry, farm subsidies have gotten way out of hand. US taxpayers paid $218 million to rice farmers in Arkansas alone to not grow rice:

http://blog.seattlepi.nwsource.com/environment/archives/137608.asp?source=mypi

Which artificially drives up the cost of food.

Also, average farm income exceeded $84,000 per household on average in 2007, mostly due to the income of large factory farms. Yet we taxpayers still paid farmers over $5 billion in tax subsidies, the result of which is higher food prices we have to pay.

I’m not against honest farmers making a good living, they work really hard and face a lot of difficult circumstances, and it’s not the small family farmers that are making a profit off this system. It’s the large, environmentally and financially irresponsible factory farms that are getting the profit.

Our farm agricultural subsidy system has gone out of control, and certain farmers have learned how to take advantage of it.

Our country could do the average taxpayer a lot of good if $5 billion bucks (of our taxpayer money) wasn’t wasted on paying farmers not to grow food.

Lee says:

April 29th, 2008 at 5:59 pm

And I have to pay taxes on the land to grow vegetables to give to the food shelf and put food on my table. Somethings wrong………

Used to be a farm girl says:

April 29th, 2008 at 6:10 pm

Instead of being all bent out of shape about subsidies from the federal government, all of the city, town, and village dwellers in the state of Minnesota should be worried about legislation that is being proposed in the state’s congress right now that would effectively shift the tax burden to anyone not living on 3 or more acres of land. There are legislators trying to make rural country estates into agriculturally classed land and therefore reducing the properties’ taxes. Those reduced taxes will be shifted to anyone living on a city lot. Essentially that hobby farmer who has a the means and the opportunity to play at farming without actually incurring any risk, will get a substantial property tax break. Those hobby farmers don’t qualify for farm subsidies normally because they have too little of a land base. But hey, if the Minnesota House and Senate want to make it easier for rich rural land owners (and not real farmers) to get tax breaks while working class city folks take it up the wazoo, why not? It’s the American way right?
That’s house bill HF4160 by the way…There’s a Senate companion bill as well. https://www.revisor.leg.state.mn.us/revisor/pages/search_status/status_detail.php?b=House&f=HF4160&ssn=0&y=2008

SusanLynnJ says:

April 29th, 2008 at 6:13 pm

A Proud Farmers Daughter!:

An agricultural subsidy is never a loan that needs to be repaid. If a farmer receives a subsidy for a crop, he or she digs it under. The crop is not stored and sold later.

???????

Also, the farms that receive the most subsidies are factory not family farms.

SusanLynnJ says:

April 29th, 2008 at 6:15 pm

Dave21:

Yes, some people take advantage of the welfare system. They are called “criminals”.

Harley says:

April 29th, 2008 at 6:18 pm

It does not matter if it a subsidy, rebates, welfare, tax credits if it cames from the government which is the tax payers it is WELFARE. The government needs to stap ALL and let each business fail or make it on their own merit.

Al says:

April 29th, 2008 at 6:22 pm

Farm Kid, I wouldn’t know about trying to make payments on the farm it’s tough enough to make house payments now that I am laid off from corporate America. Company moved off-shore, couldn’t compete here because they don’t get subsidized. You must think all of us city slickers bought houses for $59 during the depression. By the way, I wasn’t condeming the farmers but rather the subsidies being handed out like welfare.

Al says:

April 29th, 2008 at 6:56 pm

Can somebody check to see if we can’t get some of this welfare from the liberals for Al Franken.

Scott says:

April 29th, 2008 at 10:10 pm

Farm Kid –

“Go purchase some extremely high priced farm land, pay exorbitant prices for your inputs (fertilizer, seed, chemicals, fuel, etc.), plant your crops and then hope & pray that the weather cooperates. If you’re lucky, & the price is decent at harvest time, hopefully you’ll be able to cover all of your expenses & realize a profit”

Does it really matter if anything is actually produced? It is all subsidized, no matter what you will still get your money. That would be nice to know if you opened a business that no matter what the cost you would reimbursed sink or float.

Lucas says:

April 30th, 2008 at 10:13 am

1. Can someone get me a definition of a “factory farm”? Sounds like an emotionally fueled PETA and HSUS tactic to me. Oh wait, it is.
2. Subsidies slow down consolidation. Also they keep more of our food “in-house”. Thus a safer food supply so we’re not eating China’s lead.

You cannot have it both ways. In times of high prices the number of farms will stay relatively constant. As soon as this bubble bursts, and it will, more and more farms will be gone.

This “factory farm” concept cracks me up. Generally, larger farms have better-trained employees; their animals and land are better cared for. There are many small farms that do not have the means to take good care of land or livestock.

Also, keep buying your organic food, while at the same time realizing you’re killing people abroad by making all food more expensive. SUSTAINABILITY IS TECHNOLOGY! Learn the definitions of GMOs and we can lower food costs and save lives!

buck says:

April 30th, 2008 at 2:38 pm

“If a farmer receives a subsidy for a crop, he or she digs it under.”

Thats just not true at all. From a link on the actual website in the story:

Different types of domestic subsidies include:

* Farm payments: These are usually cash payments or special loans made directly to the participating producers. These payments are generally given only to the producers of certain commodities including corn, wheat, soybeans, rice, upland cotton, and oilseeds. Farm payments given to support the production of certain commodities exceeded $11 billion in 2003.

* Conservation payments: Agricultural subsidy payments made to the farmers for environmental and conservation purposes come under conservation payments. The Conservation Reserve Programme (CRP) and the Conservation Security Programme (CSP) are the two primary programmes in this category. In 2003, the US spent just over $2 billion on conservation payments.

* Disaster payments: Disaster payments are made to crop producers when either planting is prevented, or crop yields are abnormally low due to weather conditions.

If you start doing some lookups you can see that the Farm payments amount is by far the majority of this money.

Also, it should be simple to follow that “factory farms” or “farm business” get more because they plant more.

At first glance it might look like “hey I want in on that action” but its not like farmers are all driving BMW’s while home from the timeshare in Vail.

Farm Raised says:

April 30th, 2008 at 8:16 pm

Today’s farm has to mass produce in some aspects to keep up with demands by the consumers. Also, as the urban areas sprawl the farmers are forced to sell land and farm farther away.

We live on farm and our name is on this list(which I do not have a problem with), but I would like everyone to know the entire story and it fries me when people think its free money, when it is not. In order to farm successfully, we need to buy new machinery every few years, which costs more than the house we live in. On an average people work 2080 hours or 40 hours/52 weeks… Most people work an 8 hour day— we work from dawn to well past dark during the spring and fall. During the summer we have to spray and cultivate…and pray that the weather hangs in there with enough rain and sun– we do this so we can have a paycheck. Just like the rest of the workers, except our paycheck does not come every 2 week or 2x’s a month. It comes when we sell the crops or cattle.

We do not ask for this money, however we would be stupid not to take advantage of it, because it helps sustain our efforts and helps us to survive in order to help the food.

If you are really bothered by these subsidies… I think you should take the time to visit with a farmer and get a feel for what they do.

Farm Raised says:

April 30th, 2008 at 8:19 pm

One last thing… We do not drive BMWs, a Porsh, or Mercedes… We drive a Ford truck and a Chevy car, which were brought used:-)

Eric James says:

May 1st, 2008 at 11:44 am

Consider this, almost all aspects of society is “subsidized” today, whether it be a forgiven loan for a commercial improvement on Nicollet Avenue or farmland out in Nicollet County. The spirit of helping others get established is because we as a society value such things as good retail streets, fresh local food, a vibrant economy, and people who have jobs. There is no ill-intent to it. It’s only that, overtime, it’s difficult to repeal or adjust these subsidies because they in essence BECOME part of the business model. They become guaranteed assets instead of seen as credit. The whole debate with the MOA parking regards setting a bad precedent, do we then allow all developers to divert public money for their projects? When farm subsidies were created and for many in this debate and on this forum right now, this happened decades before we were born, they were meant to preserve a way of life that we valued and localized. Unfortunately as time goes on, we forget why we did it and allow it to become commonplace. A farmer’s pro-forma is dependent on subsidies now and like one person said, we need to ween it off.

Amy says:

May 12th, 2008 at 2:12 pm

When is the last time you saw a farmer driving a BMW with a Rolex watch on his/her wrist? Please. Go after the corporate welfare.

Farm kid 2 says:

May 12th, 2008 at 9:56 pm

Scott says: “Does it really matter if anything is actually produced? It is all subsidized, no matter what you will still get your money. That would be nice to know if you opened a business that no matter what the cost you would reimbursed sink or float.”

You mean government bailouts of businesses like of airlines, car manufacturers (Chrysler), and Wall street banks?