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Posted 10.28.12

From River Republic: The Rise and Fall of America’s Rivers by Daniel McCool, published by Columbia University Press and reprinted with permission.


Farmers are perhaps the only people in modern America who still understand and appreciate the value of demanding physical labor. They value work not just for its productive capacity but also for its ability to build character. The virtues that we typically ascribe to the quintessential American—honest, hardworking, thrifty—are derived from the archetype of the family farmer. It is not surprising that Thomas Jefferson and many of his contemporaries felt that farmers would be the essential backbone of democratic government—that a government without the benign imprimatur of the yeoman farmer was doomed. Of course, at the time of this nation’s birth, farmers comprised more than 90 percent of the population, so promulgating such beliefs was politically popular. A half-century later, small farmers went to war against the South’s slavocracy in the name of free labor and the Union. When the North triumphed, the London Times effused that a “nation of farmers and traders” had kept “the jewel of liberty in the family of freedom.” Such was the stuff of farmers.

It is still politically popular to trumpet the values of the farmer. The only trouble is that the classic family farmer that so enthralled Jefferson and the London Times is largely a relic of yesteryear. There are only 2.2 million farms in a nation with a total population of 311 million (in 2011). And most farm production comes from giant agricultural corporations and very large family farms. Most important, the legendary thrift and self-reliance of farmers have been replaced by a system of subsidies and handouts so byzantine, enormous, and illogical that it defies the imagination. What does all this have to do with rivers? A great deal, since agriculture consumes 34 percent of the nation’s water; that figure climbs to over 80 percent for the arid western states. In addition, agriculture is now one of the largest sources of water pollution in the nation. And agriculture is one of the largest users of the nation’s barge channels, which have had devastating impacts on riparian habitat, wetlands, and riverine species. The extractive use of the nation’s rivers for a single industry competes directly with other river uses, such as fishing, hydropower, urban amenity use and potable water, recreation and tourism, and endangered-species protection. As a result, agriculture plays a role in most river restoration efforts. The impact of agriculture on our waterways is so great that a true rebirth of America’s rivers will require fundamental changes in federal agricultural policy. A little history and some political context are in order to understand the challenge.

THE AGRO-INDUSTRIAL COMPLEX

My father grew up in the farming community of Dana, Indiana, where his parents ran a small general store on Main Street. When I was a boy, my Dad would often tell stories about the Great Depression and the crushing impact it had on Dana. Once a fairly prosperous town composed of Jeffersonian yeomen, Dana became destitute almost overnight. Farmers would show up at the McCool store, hat in hand, and ask for credit. They were loath to go into debt, but they could not feed their own families, much less sell enough crops to make a decent living. My grandparents dutifully extended credit to them—their neighbors and friends—even though it nearly drove them out of business. Many years later, after the worst had passed and President Franklin D. Roosevelt had helped rescue rural America, farmers would come into the store and ask how much they owed from those dark years of the Depression. My grandfather would dutifully pull a card out of a shoebox full of credit vouchers and tell them. And they would pay. Now that, my father would say, is real integrity.

One of the reasons that many Dana farmers got back on their feet was the various assistance programs devised by the Roosevelt administration and its attendant alphabet-soup agencies. Foremost among these was the Agricultural Adjustment Act, administered by the Agriculture Adjustment Administration. It dealt directly with a problem that had plagued American farmers for generations—an oversupply of basic food crops. In effect, farmers were too productive and too numerous. In most years, they flooded the market with their products, which drove down prices. In a free-market economy, this would have forced the least efficient farmers, and those producing crops for which there were no buyers, to find some other way to make a living. But in the Depression, there was no other way to make a living in an economy with 25 percent unemployment. So Roosevelt paid them to reduce their crop acreage; he rewarded them for doing less work. In the short run, that was a great idea. In the long run, it’s a runaway freight train full of pork-barrel subsidies.

The Depression ended in 1941, but by then the price supports, loan guarantees, crop insurance, and numerous other assistance programs had become an article of faith, the holiest of Beltway sacred cows. No one wanted to take on the icon of American Gothic, even though most families had been bought out by corporate operators; by 2007, 75 percent of all farm production came from just 125,000 farms. These big corporate farmers hire legions of lobbyists and make enormous campaign contributions. Corporations got into farming because it was an easy way to “cultivate” federal handouts and make a very handsome profit. The crops that bring in the most federal money are corn, wheat, cotton, and rice, but there are also big payouts for barley, sorghum, soybeans, dairy products, sugar, and a smattering of other grains and oilseeds. In the 1980s federal payments to farmers increased by 234 percent; in the 1990s they grew by 120 percent. Between 1984 and 1994, agricultural subsidies totaled $135 billion. From 1995 to 2010, taxpayers shelled out an additional $261.9 billion, according to the Environmental Working Group (EWG). Yet farm-subsidy advocates in Congress complain that they aren’t getting enough of our money and should not be cut in the budget-cutting year of 2011: “Funding for farm policy, including crop insurance, over the last five years averaged $12.9 billion per year, a 28 percent reduction from the 2002–2006 average of $17.9 billion per year, and a 31 percent reduction from the 1997–2001 average of $18.8 billion.”

The irrationality of this giveaway is heightened by the fact that much of the subsidized cotton and rice is grown in the desert. Growing overproduced tropical crops that consume scarce water in arid regions does not make economic sense—it’s like grazing cattle in the Arctic. No rational business person would do that—unless you can get taxpayers to cover much of your business overhead and guarantee a profit.

The subsidy programs are so large and complex that the Department of Agriculture is not even sure who is being paid. A 2004 GAO report found that the Department had paid hundreds of millions to people who were not even eligible farmers. A Washington Post investigation in 2006 found that $1.3 billion was given to people who don’t even farm; suburb developers of former farm acreage advertise that home owners can collect government checks on the acreage in their yards. A 2007 GAO report discovered that between 1999 and 2005 the USDA had paid $1.1 billion to dead farmers. Chicago voting starts to look clean compared with this operation.

No significant changes to the farm-subsidy program took place until the passage of the 1996 Federal Agriculture and Improvement Act, which was meant to wean farmers from the federal dole. It also initiated a new land-conservation program that has resulted in some acreage being returned to a natural state. The conservation reserve program has been a success, but the goal of eliminating the subsidies by providing “emergency” and transition payments to farmers only resulted in more big payoffs. By 2002 these temporary emergency payments had cost $71 billion, and farmers were still growing the same overproduced crops. In 2002 Congress gave up trying to bring capitalism to farm country, and the 2002 farm bill brought back the New Deal– style subsidies, bigger than ever, and committed to $81 billion in new subsidies for the next ten years. President Bush’s 2004 budget continued the largess, earmarking $174 billion over ten years for the euphemistic “farm safety net,” a program that would make Stalin smile.

By 2000 the farm industry had become one of the biggest recipients of federal handouts, making it what the Heritage Foundation called “America’s largest corporate welfare program.” A 2011 GAO analysis included direct farm programs in a report on wasteful government programs, noting that the payments went primarily to the largest, richest “farmers,” even in years of record farm income. The industry is so well entrenched that it is not an exaggeration to refer to an “agro-industrial Complex,” much akin to the military-industrial complex that Dwight Eisenhower warned about in his farewell address. Taking a page from the defense industry, big agriculture has finely honed its skill at “defeat-proofing” massive farm subsidy bills by adding programs for nearly every state and congressional district in the nation. There are food stamps for the poor, school lunch programs for public schools, and support for organic farmers. Even Washington, D.C., gets price-support funds for growing crops on some postage stamp–sized lot.

Everyone gets a piece of the pie, but the lion’s share goes to a handful of megacorporations. Twelve Fortune 500 companies received large subsidies in 2002; one of them, John Hancock Insurance Company, collected $2.3 million that year from American taxpayers. Kenneth Lay, the deposed chairman of the defunct Enron, pocketed $18,000. Even a Tea Party candidate raked in farm handouts. The Environmental Working Group study cited above found that two-thirds of America’s farmers received nothing or a paltry amount, but 10 percent of the beneficiaries consumed 72 percent of the payments. A study by the Department of Agriculture in 2004 found that just 8 percent of the recipients collected 78 percent of the money, while the other 92 percent of farmers were given an average of less than $1,000. Another USDA study found that in 2001 nearly 60 percent of all government farm subsidies went to farms with a net worth of more than $600,000, noting that “payments tend to be concentrated among the larger farms.” A few large farms in California’s Central Valley collect millions from multiple types of subsidies.

There are both acreage and income limits on subsidies, but corporate farmers have found clever ways to avoid them by creating false front farms that mask their true ownership and income. In California’s Central Valley a number of big farms set up dummy partnerships to get around the 960-acre limitation. One of them, the 23,000-acre Boswell Farms—a big user of subsidized water—collected nearly $11 million between 1995 and 2006, according to EWG figures. A study by the Heritage Foundation found that one farm in Arkansas, Tyler Farms, collected $32 million in subsidies in just five years by dividing itself into sixty-six separate corporations.

A study by the Washington Post in 2004 found that farms exceeding the income limit still got $312 million. A 2008 GAO report found that the USDA had paid 2,702 farmers who exceeded income limits. As the New Republic put it, “Agricultural corporations have proven themselves adept at circumventing existing limits on farm subsidy payouts.”

Subsidies are also concentrated in the states and districts of the legislators who serve on the agriculture committees in Congress. An EWG study discovered that farmers in just 19 congressional districts (out of 435) collected half of all subsidies between 2003 and 2005.

It is necessary to understand this larger context of farm history and subsidies to gain an appreciation of how difficult it is to challenge the status quo on rivers that are diminished or compromised by subsidized agribusiness. With so much federal largesse at stake, there are increased conflicts between river restoration and agriculture that uses rivers for barge transportation or subsidized hydropower or diverts water that would otherwise maintain the health of river ecosystems. It means there are conflicts between endangered species and farmers, fishermen and farmers, cities and farmers, recreationists and farmers, and water- quality efforts and farmers—“farmers” meaning corporate agriculture in most cases.

Many of these conflicts exploit an image of the farmer as a lonely outpost of Americana, fighting against alien forces—the banks, big- city high rollers, foreign owners, or faraway government agencies. It is an iconic image: intrepid locals confronting faceless authority in a saga reminiscent of a John Steinbeck novel. There are certainly instances of that in American history, but many water conflicts are dominated by large agribusiness or energy corporations working in partnership with those “faceless authorities” in the government. They rule the roost. In the American West, agriculture consumes about 80 percent of the water that is diverted, making irrigation districts powerful and reactionary. This is in spite of the fact that in most western states agriculture is a small fraction of the economy, and the most produced crop is water-sucking hay. For example, in Oregon, agricultural production is only 2.26 percent of the state’s economy, and much of this is due to subsidies; in 2002 the state’s farmers collected over $80 million from the feds, according to Environmental Working Group data. In my home state of Utah, agriculture consumes about 85 percent of the water (90 percent of which is used to grow hay), but produces only 0.3 percent of personal income. In the arid state of Arizona, agriculture—mostly cotton production—is only 1 percent of the economy but absorbs 70 percent of the water. In short, irrigated agriculture is a powerhouse in the West and uses most of the water but produces only a small part of the economic output.

This is not for lack of effort. There are 55 million acres of irrigated farmland in the United States, mostly in the West. These farms consume 90 million acre-feet of water annually, according to the National Agricultural Statistics Service (NASS). The biggest crop, in terms of water consumption, is hay, which is a low-value crop that requires a great deal of water. Next on the list is corn, which is an overproduced commodity crop that generates federal subsidies. Other heavily subsidized—and irrigated—crops are cotton, wheat, rice, barley, sugar, and soybeans, according to NASS survey data. Thus, in most western states, agriculture has a wildly disproportionate impact on water supplies and the local economy.


Originally published in This Land, Vol. 3, Issue 19. Oct. 1, 2012.

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