Agricultural Subsidies--Who Is Paying The Price?

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In reading the Baker City Herald over the last year, you may have noticed all the concern, adulation and general gratuitous genuflection given to our neo-feudal lords, the agricultural aristocracy, or “producers,” as they like to be called. (Some like to be referred to “irrigators,” a special form of “producer” lucky enough to have water rights.)

I guess the insinuation is that the rest of us, who engage in some form of labor or another, just don’t produce much. Teachers and parents may help produce an educated citizen, health care and social service workers may team up to produce healthy human beings, brick layers, roofers and carpenters may produce homes and cities, etc., but following the practice of the new commercial form of “branding,” the word “producer” has been unofficially expropriated by the Ag community in the rural West. Can a copyright of the word be far off?

Helping to inculcate a reverence for these “producers.” was a long series of front page articles in the Herald this summer with titles of “Ranchers say grazing plan falls well short,” “State issues drought emergency,” “Area’s ranchers wrangle with confusing changes,” “Ranchers say relief falls short,” and “Relief finally arrives for ranchers.”

Two such articles, lumped under the giant banner “Paying The Price,” appeared on the front page in early August. They heaped sympathy on the plight of our poor ranchers facing yet another year of drought. The paper devoted over a page and one half out of 12 pages to the effects of this year's drought on ranchers and the choice they faced of either cutting herds or buying expensive hay and cutting their income to the bone.

One useful piece of information to be found in the article was a quote from rancher Clair Pickard of Keating: “We’re no different than cattle dogs—basically we’re unemployable.” You’ve got to respect Mr. Pickard’s honesty. I don’t know if Mr. Pickard is a public lands rancher or not, but what public lands ranchers know how to do is to get the cows on the allotment in late spring or early summer and attempt to get them all back in the fall. Not exactly a high skill specialty.

The front page also informed us that “The driest summer in more than 80 years has stunted the hay crop. Now ranchers are stuck with the bill.” Or are they?

Upon closer inspection, it appears that taxpayers are helping ranchers, farmers, and other “producers” with their bills. In an article titled “Cash cow farm bill is a full plate in Congress,” last Sunday’s Oregonian explained that the farm bill being considered in Congress this week “As written . . . would cost $950 for each of the 303 million people in the United States.”

According to the Environmental Working Group (See http://farm.ewg.org/farm/top_recips.php?fips=41001&progcode=total ),
in the 11 year period from 1995 to 2005, 585 “producers” in Baker County received about $13.1 million in subsidies. Most of the money went to the top 40 recipients who received amounts ranging from $85,000 to $613,000 over the 11 year period. The top 20 recipients (3.4% of recipients) received $4.7 million, almost 36% of the total payout, and the top 40 recipients (6.8% % of recipients) received $6.95 million, over half (53%) of total subsidies. 321 recipients, 55% of recipients, received less than $5,000 each in subsidies during the period.

A plethora of complicated and confusing programs exists to bail out “producers” when they suffer losses from unsustainable herd sizes or crop failures. There is at least one program that even pays them not to “produce.” That’s the Conservation Reserve Program ($1.8 billion in 2006) which pays land owners not to farm or graze some of their land, i.e., “to retire highly erodible and other environmentally sensitive cropland and pasture.” I gather from the program summary that giving them your tax dollars keeps them from using land that shouldn’t be used in the first place and allegedly creates wildlife habitat (quite often for non-native huntable wildlife like pheasants). I suppose the main reason for this program, which is also cited by the summary, is that “The program also assists farmers by providing a dependable source of income.” Hmmm, I wonder if I can get the government to pay me not to raise my chickens or to pay me to plant those trees and shrubs I’ve been wanting so as to provide winter berries for birds? I could sure use a dependable source of income!

Also, as mentioned in Herald articles, millions are available from the Emergency Conservation Program which “provides emergency funding and technical assistance for farmers and ranchers to rehabilitate farmland damaged by natural disasters and for carrying out emergency water conservation measures in periods of severe drought.”

Other special considerations, such as Livestock Assistance Grants and low interest loans, follow from declarations of “drought emergencies” and natural disaster pronouncements. But “producers” benefit from more than just disaster and conservation subsidies—they also receive millions in commodity subsidies for crops like wheat and potatoes and from various crop insurance schemes, one of which, called Pasture, Rangeland, Forage insurance, is reported to provide a sizeable return to “producers” over time (Herald, 8/28/07). Much of the County road budget is used to maintain roads used primarily by “producers,” including some that are little more than long driveways to a “producer’s” home. Then there are many State programs, from OSU’s $5 million budget for Statewide Public Services, including the Extension Service, the Agricultural Experiment Station, and the Forest Research Laboratory, to State funding of juniper eradication, all of which benefit “producers.” And don’t forget the thousands spent by governmental agencies locally to “produce” all those dead coyotes by aerial gunning from helicopters—a really misguided and futile effort to control predation on privately held livestock.

Another hidden flow of dollars from local city dwellers and others to “producers” is the $280,000 or so that the folks in the Baker Valley Vector Control District pay for mosquito control. Control activity has become increasingly important since the arrival or release of the virulent Israeli strain of West Nile Virus several years ago. Local newspapers have repeatedly given the impression that cleaning out your bird bath and other sources of standing water in the back yard will help solve the problem, but this is quite unlikely. West Nile is carried by the mosquito, Culex tarsalis--AKA, the “irrigation mosquito.” It rarely reproduces in birdbaths, but breeds in huge numbers in the ditches and flood irrigated fields of “producers.” Quoting a paper from South Dakota State University, one of several that are in agreement about the reproductive requirements of the mosquito, (http://biomicro.sdstate.edu/Hildrethm/mosquito/LarvalHabitat/CulexTarsalisHabitat.htm ): “Culex tarsalis is a dispersive colonizing species in which its larval stages are most frequently found in freshly created aquatic habitats with high primary bacterial, protozoan and invertebrate productivity associated with vegetative decay (Beeha and Mulla, 1995; Fanara and Mulla, 1974). These larvae are often one of the first macroinvertebrates to colonize newly-created, sunlit surface water pools generally surrounded by grasses and annual vegetation. Once productivity has reached its plateau, oviposition decreases. Waters that are highly polluted with organic material are not tolerated, and abundant populations are not generally found in permanent water with fixed depths. Development during these stages is also known to depend strongly on water temperature, food availability and refugia from exposure to physical disturbance and predators. These conditions are most notably associated with irrigated pastures, and for this reason, Cx. tarsalis is often referred to as the irrigation mosquito.”

The studies show that it thrives in new pools of water in close contact with vegetative material and that to get reproduction from artificial sources like barrels or birdbaths, you would need to add topsoil or grass sod vegetation, which is not the normal practice of city dwellers and non-irrigators in the County. No, large numbers of West Nile spreading mosquitos are not caused by your birdbath, they are largely the direct result of the irrigation practices of “producers.” City folk have little to do with the creation of the problem, you just get to offer up your hard-earned money to pay for the currently used solutions. (The effects of the sprays used for control on non-target populations are a subject for a future article.)

Perhaps the Grandmother of subsidies to “producers” comes in the form of property tax relief by way of the Farm Deferral Program. In an effort that is intended to keep farm and timber lands in production, “producers” in the appropriate zones are given extremely low tax rates and pay at only a small fraction of the rate forced on city dwellers and others. This public largesse had little effect on many “producers” who rushed to subdivide and develop their property for other uses in the wake of Oregon's Measure 37. The State’s efforts to preserve farmland became then a simple subsidy for “producer” land speculation.

Finally, there is perhaps the Granddaddy of all subsidies for a single agricultural use—Federal subsidies to public lands ranchers for grazing on U.S. Forest Service (or as I prefer to call the agency: U.S. Feedlot Service) and Bureau of Land Management (Ed Abbey’s Bureau of Livestock and Mining) lands. According to a 2002 study by the Center for Biological Diversity, the public lands grazing program resulted in a direct loss from the U.S. Treasury of $124 million in 2000. This figure is likely becoming larger as the fee is down to $1.35 a month for the rancher to feed a cow and rather large calf—less than it would cost you to feed a pet hamster. As large as this figure is, it is the enormity of the indirect costs that are responsible for the outrageous size of the subsidy. If you include the cost for various support services, mitigation costs for the tremendous amount of grazing damage to riparian areas, imperiled species, etc., as well as lost recreational and other non-commercial opportunities, the study figures the full cost of the Federal public lands grazing program is probably between $500 million and $1 billion annually.

When one takes a careful look at the flow of tax dollars, what ultimately emerges is the picture of a privileged class of wealthy landed aristocrats, who pay proportionately less in property taxes, but who reap a cornucopia of public services and subsidies.

Subsidizing the Gambling Habit

Getting back to the local “drought emergency” and “disaster” issue: Drought is almost the rule, rather than the exception, in the West. Historically, it has occurred on a fairly regular basis. Everyone who lives here, including ranchers and farmers (aka, “producers”) knows it. It is darn near a desert here in the lower elevations of Baker County, so why are so many pretending like drought is a big surprise? It is also pretty darn cold in the winter. Would you pay farmers a subsidy if they were raising bananas and avocados, and the trees suffered a "disastrous" freeze every winter? Drought is a known risk in the west—Why should taxpayers subsidize those who know they will suffer losses because of it? If you know that losses will occur due to the nature of the environment you operate in, then the prudent thing to do is to plan for it, not to go begging when the predictable losses occur.

Just in case you think I am making this up, the following is a summary of some of the available drought data for North East Oregon:

Drought frequency in N.E. Oregon

• Over the 105 year period between 1900 to 2005, drought has been experienced in one out of every 5 years. (21/105)

• Over the same period, severe drought has been experienced in one out of every 8 years. (13/105)

• Over the same period, extreme drought has been experienced in about one out of every 15 years. (7/105)

• 6 out of the last 8 years have ranged from drought or near drought to extreme and exceptional drought, which is similar to the period of drought in the 1930’s.

Supporting data can be found at http://www.WeatherPerspectives.com (Oregon, Region 8).

Because drought is a naturally occurring event that is known to occur with some frequency in North East Oregon, any so-called disaster, or financially uncomfortable impacts due to its occurrence, can be viewed as having occurred due to human negligence. In other words, if you know that you are facing a drought situation every five years on average, you need to plan activities that could be impacted by drought, such as farming or ranching, with that fact in mind. The prudent thing to do would be to keep your herd size near that size which could be economically and sustainably fed during a drought situation and to depend financially only those acres which could be irrigated with the water that could reasonably be expected to be available during dry years. If one tries to maintain acreage or a herd size beyond the prudent maximum, they are rolling the dice and shouldn’t go crying to hard-pressed taxpayers for bail out subsidies on a bet gone bad. Unfortunately, that is what occurs on a regular basis, with pronouncements of so-called disaster relief, and it amounts to many thousands of subsidy dollars in Baker County and the rest of the drought-prone West. If you like to gamble, then do it with your own money. (Alternatively, give up on the idea that only special interests should be bailed out for their irresponsible behavior. Create a society where every one who makes and honest effort is supported.)

Welfare Ranching, Welfare for the Rich, and the Neo-Feudal Rural Culture

The deference paid to agriculture, the so-called “producers,” can be explained by the fact that they own large tracts of land which have brought them a good deal of economic and political power (not unlike the merchants on Main Street). In addition, they and others have fed myths that portray ranchers and farmers as a more noble and deserving sort of human being, regardless of how they obtained their land and wealth. The consequences of their economic power are predictable in an alleged democracy that is corrupted by those who have money and the power it provides. Their power has allowed them to advocate for laws that maintain their position and transfer wealth to them from the middle classes and poor of our society. (I should clarify here that I am not referring to the small farmer or private land rancher with a few acres, although they too, in some cases, may benefit from the legislation enacted in favor of the wealthy land owners.) Income caps for subsidies are resisted by Congress because of the financial (campaign contributions) power of large farms and ranching operations. Do wheat growers, who now are getting over $10.00 a bushel really need subsidies? The existing situation, including most importantly, the magnification of the myths by our servile media, results in a perception by the public at large that agriculture, and its “producers,” are fully deserving of the subsidies they receive, while other segments of society receiving subsidies of one sort or another are suspect, if not outright cheats and no-accounts.

So who are the local recipients and what are the benefits that they receive? Until recently, these benefits remained hidden behind a wall of secrecy, but due to changes in record keeping and public access, the Environmental Working Group (see http://farm.ewg.org/farm/top_recips.php?fips=41001&progcode=total for much more info) has been able to establish a database documenting the recipients of these wealth transfers. (I had been intending to disclose these recipients in my blog for the last year, and a recent article in the Oregonian on the subject, as well as prodding by a local activist, has prompted this follow through.)

According to the EWG database, the top 60 recipients in Baker County for the years 1995 -2005 are as follows:

Rank &Recipient Total USDA Subsidies 1995-2005

1 Ward Ranches Baker City, OR 97814 $613,394

2 Blatchford Brothers Baker City, OR 97814 $559,898

3 Leland Hellberg Lowden, WA 99360 $347,615

4 Gary Bloomer Durkee, OR 97905 $321,136

5 Hubbard Ranch Enterprise, OR 97828 $317,879

6 Kerns Rainbow Ranch Inc Haines, OR 97833 $311,507
The owners of Kerns Rainbow Ranch are:

• Fawn A Kerns Haines, OR 97833 2.76 %
• Tom L Kerns Haines, OR 97833 12.77 %
• Tim L Kerns Haines, OR 97833 34.47 %
• Janice L Kerns Haines, OR 97833 34.47 %
• Tim A Kerns Haines, OR 97833 15.53 %

7 Cal Worthington Folsom, CA 95630 $299,239

8 Allen Ranch Inc Haines, OR 97833 $271,244

9 Oliver Wilde Baker City, OR 97814 $241,969

10 Lazy S Over 7 Inc Durkee, OR 97905 $227,742

11 Ducks Unlimited Inc Vancouver, WA 98683 $221,332

NOTE: Over 80 percent of the payments listed for Ducks Unlimited are 'cost share' reimbursements for technical assistance to restore wetlands at many locations on private lands not owned by D.U. The technical assistance is provided to private landowners under contractual arrangement through USDA's Natural Resources Conservation Service.

12 K Diamond Inc Haines, OR 97833 $215,654
The owner of K Diamond Inc is:
L Brent Kerns Haines, OR 97833 100.00 %

13 R John Wirth Baker City, OR 97814 $210,010

14 Freeman Angus Rnch Inc Baker City, OR 97814
$188,557
15 Clint Wendt Haines, OR 97833
$165,284
16 Ted W Bloomer Durkee, OR 97905
$164,800

17 Double J Land & Cattle ✴ Pendleton, OR 97801 $164,103
The owners of Double J Land & Cattle are:

• Pat Juhl
Pendleton, OR 97801 50.00 %
• John T Johnson
Pendleton, OR 97801 50.00 %

18 Bloomer Ranches Inc ✴ Durkee, OR 97905
$160,102
The owners of Bloomer Ranches Inc. are:
Ted W Bloomer
Durkee, OR 97905 50.00 %
Diane G Bloomer
Durkee, OR 97905 50.00 %

19 Douglas R Stanford North Powder, OR 97867 $154,727

20 Harrell Land & Livestock Ltd ✴ Baker City, OR 97814 $145,968

21
Valley View Dairy & Ent Inc ✴
Haines, OR 97833
$144,678
22
Rohners Dairy Inc ✴
Baker City, OR 97814
$142,396
23
Noble Lumber Inc ✴
Beavercreek, OR 97004
$139,168
24
Allen Farms Inc ✴
Haines, OR 97833
$139,129
25
John Bootsma
Baker City, OR 97814
$131,726
26
Bill Loennig
Haines, OR 97833
$128,401
27
Daly Creek Ranch LLC ✴
Zephyr Cove, NV 89448
$124,719
28
Blatchford Farms Inc ✴
Baker City, OR 97814
$120,039
29
Powder River Ranch ✴
Baker City, OR 97814
$116,830
30
Jacobs Ranches Inc ✴
Baker City, OR 97814
$114,443
31
Dave Blatchford
Baker City, OR 97814
$110,603
32
Jack Harris
Huntington, OR 97907
$106,222
33
Lindsay Brothers ✴
Shedd, OR 97377
$104,324
34
Allen Brothers ✴
Haines, OR 97833
$97,708
35
Joel Wendt
Haines, OR 97833
$96,307
36
Harrell Hereford Ranch Inc ✴
Baker City, OR 97814
$94,192
37
Ted S Bloomer Estate ✴
Durkee, OR 97905
$92,149
38
Roger W Smith
Haines, OR 97833
$86,448
39
Lois L Mcniece
Baker City, OR 97814
$85,268
40
Suzanne M Kindree
North Powder, OR 97867
$84,992
41
Stephen J Brocato
Baker City, OR 97814
$83,699
42
Maxwell Ranch ✴
Haines, OR 97833
$83,563
43
Louis E Marks
North Powder, OR 97867
$79,876
44
Patrick Sullivan Dba Sullivan Lan ✴
Hereford, OR 97837
$78,408
45
John Randall
Richland, OR 97870
$77,159
46
Durbin Creek Ranch ✴
Huntington, OR 97907
$73,772
47
Ted S Bloomer
Durkee, OR 97905
$68,887
48
Donlon H Gabrielsen
San Rafael, CA 94901
$68,298
49
Merlyn L Mcgarry
Baker City, OR 97814
$66,862
50
Charles J Conro
Haines, OR 97833
$66,454
51
Richard Stephens
Haines, OR 97833
$66,166
52
Owen Family Revocable Trust
Durkee, OR 97905
$63,951
53
Phillips Ranch Inc
Baker City, OR 97814
$63,118
54
William M Mcginn
Haines, OR 97833
$62,774
55
Ingram Ranches Inc ✴
Haines, OR 97833
$61,941
56
Lee C Wright III
Fruitland, ID 83619
$59,434
57
Hay Inc ✴
North Powder, OR 97867
$57,503
58
Ssi Land And Cattle Co ✴
, 00000
$56,890
59
Richard Murray
Richland, OR 97870
$54,952
60
Dorris D Parker
Roseburg, OR 97470
$54,317

For more complete information on all recipients go to the web site listed above.

Some more findings:

• Total USDA Subsidies from farms/ranches in Baker County, Oregon totaled $13,057,000 from 1995-2005.
• Commodity subsidies in Baker County, Oregon totaled $7.3 million from 1995-2005.
• Conservation payments in Baker County, Oregon totaled $3.5 million from 1995-2005.
• Disaster payments in Baker County, Oregon totaled $2.3 million from 1995-2005.

What’s Wrong With This Picture?

Supervisor Tim L. Kerns, and his wife Janice L. Kerns, are listed in the EWG database as owning roughly 69% of Kerns Rainbow Ranch Inc., which the same database says received $311,507 in USDA subsidies during the 1995 to 2005 period. These subsidies included $293,166 in commodity subsidies and $18,341 in “disaster” subsidies. The ranch received no subsidies for conservation. So Tim L. and Janice should have received about 69% of that, or $214,753 over the 11 year period, an average of approximately $19,523 per year in subsidies. A listing of the County land holdings in their name on the Assessor’s office webpage shows that they own in the neighborhood of 2,395 acres, most of which is zoned Exclusive Farm Use and is in farm deferral for tax purposes. They may own other acreage under other business names that I am not aware of. The web site also shows that on a real market value of $3,791,120 ($3.7 million), they pay about $11,911 dollars a year in property taxes (not including any discounts for timely payment) for their listed acreage and assorted homes. So, fortunately for them, the subsidies more than pay for their property taxes each year and leave them a tidy sum to apply towards any State or Federal tax they couldn’t find deductions for.

Also according to County tax records, City manager Steve Brocato owns 148.5 acres in the County (Halfway, as I recall) in addition to his properties in Baker City. He pays annual taxes of 1,340.37 on those acres (about $9.00 per acre.). He has received $83,699 in USDA subsidies during the period from 2002 to 2005. It is not clear whether he also owns an additional 240 acres in the name of BROCATO EXCHANGE WXO61210,LLC with a mailing address of Salem, OR, or if he owns properties receiving subsidies elsewhere. The taxes on those additional 240 acres amount to $916.96. Even if he also controls those properties and the USDA subsidies can be attributed to them, it is clear that the subsidies he receives more than cover all the taxes he might have owed on currently listed farm properties in Baker County during the 4 year period.

The EWG database shows that the president of the Baker County Livestock Association, Curt Martin, of North Powder has received payments of $93,628.38 from 1995 through 2005. According to the Herald, even in the face of all the taxpayer generosity, when referring to current drought relief programs, Martin still mustered up the chutzpah to tell his Oregon representative: “With all due respect, this isn’t going to cut it….” Was he pleading simply for more money, or was this a threat about the level of future campaign contributions?

Relief for the Serfs

I wonder if the Herald and our government entities would be willing to show some concern for county residents who also face emergency or disaster situations. Their problems, as in the case of ranchers, may be due to their own irresponsible behavior, or to events beyond their control. Many people, for example, realize that the instability in the Middle East and speculative trading by Wall Street scammers, both of which were either caused or tolerated by the Bush administration, are responsible for much of the increase in oil prices. Fuel oil prices have more than doubled, and have impacted many low-income residents who rely on fuel oil for heat. Others may have been knocked down when the housing bubble burst. The situation can be a financial disaster for these folks, pushing some over the financial and emotional edge, but I haven’t seen any efforts to address their problems or many others that regular people face, even though the government is regularly bailing out the wealthy, like large “producers” and financial wheeler-dealers. With all due respect, I’ve got to tell you, this isn’t going to cut it.