Federal aid protects farms from volatility

Farming is one of the few businesses where you produce a product and then ask customers, “what will you give me for it?”

Prices fluctuate year to year for corn, soybeans, grain, beef or other farm products. Add unpredictable weather events, and those are some of the reasons why the federal government pays American farmers billions of dollars a year. Ohio ranks 14th in the nation for subsidy levels; tens of thousands of farmers across the state received nearly $4 billion in various government subsidy programs from 1995 to 2009, according to the Environmental Working Group.

While commodities and disaster subsidies can provide a safety net for farmers, other programs enable the government to put environmental controls on how the land is used.

William T. Roe lives on one of the four farms he owns, about 370 acres in Butler County, an estimated 80 acres in Sandusky County, not counting land he leases to others for farming.

Roe, a certified Angus beef grower, received nearly $51,000 in 2009 as part of the federal Environmental Quality Incentives Program and was the second top recipient of farm subsidies in Butler County that year (receiving $98,000 in subsidies since 1995, according to Environmental Working Group records).

Roe said the money was used to build one of two barns specifically designed to store manure and turn it into compost. Roe said it enables him to save money by not buying commercial fertilizer every year and helps the environment by keep phosphorus levels low in the soil.

“You don’t make money through (the EQIP) program,” he said. “What the government does is provide incentives for farmers to take certain directions and encourage them to do certain things.”

Programs like EQIP require the farmer to comply with strict building code regulations and guidelines.

Roe and others use government-supported global positioning systems to track how much fertilizer is needed on the fields. The GPS system notifies the person spreading the fertilizer in real-time, indicating how much to spread and where and where not to spread.

The process saves time and lots of money through reduced fuel costs, Roe said.

Roe sells his large, healthy scientifically bred bulls, heifers and cows at premium prices as high as $10,000 per animal. He selectively breeds for certain traits, like average daily weight gain, a gentle disposition and high degrees of marbling of the meat.

“In reality, what the public is getting for what they’re spending, they’re getting a bargain,” he said.

Frank Batsche Jr. owns 264 acres that borders Acton Lake at Hueston Woods in Preble County. Batsche leases the property for others to farm it. He is listed as receiving $54,000 in 2009 on the EWG subsidies list.

Batsche, who is retired and used to farm in Mason, said it’s a “substantial sum” that he didn’t ask for and from which he didn’t profit. The payment was granted through a federal conservation subsidy to build a drainage system that prevents erosion and runoff into the watershed. Batsche said the money went directly to the contractors.

“(Subsidies) are good for farmers,” Batsche said. “The big corporate farmers, that have thousands of acres, we should watch the subsidies on them. But to the small individual farmer ... 250 acres really isn’t enough to make a living.”

While not an expert, Miami University economics professor Jim Brock said he teaches his students the basics about the farming industry and how “price supports” work.

“I think there is a legitimate economic case to be made in favor of these traditional subsidies,” Brock said. “Part of the idea of subsidies is to keep the family farm viable ... In some cases, corporations play a larger role in the production of food.”

Brock noted one important change that’s been made is putting limits on the size of subsidies based on the size of the farming operation. The biggest farms, which needed the least help, were getting the lion’s share of payments while the smallest farms that needed the most help were getting less.

The small farmer still lags considerably in subsidy amounts. Consider that, from 1995 to 2009, half of Ohio farmers did not collect subsidy payments; 10 percent collected 70 percent of all subsidies, according to the U.S. Department of Agriculture.

Brock said there’s an ongoing debate about the role of the USDA.

“Should it be doing research and promulgating large scale crop production, or should it help small farmers out as building blocks of a decentralized free society?” he said.

Greg Blanton is one of three brothers who are part of two Middletown-based family farm cooperatives that combined received more than $6 million in subsidies between 1995 and 2009. Together the Blanton cooperatives received more in subsidies than any other farm operation in Ohio during that time, according to the Environmental Working Group. They plant and harvest corn, soybeans and wheat on hundreds of acres in eight different counties.

Blanton reluctantly offered a few comments. He said people think farmers are getting rich on subsidies, but much of it is used to cover expenses, like chemical and fuel bills. He said there are a lot of guidelines to adhere to when receiving subsidies, which enables the government to monitor and control the farming industry.

“If there were no subsidies, we would deal with that. We would be just as happy if there was no government to answer to,” he said. “It looks like a lot. People think we’re getting rich, but we have to pay (bills).”

Farmers sign up for and comply with subsidy programs and many of the “old-timers” continue to go without federal handouts, according to Warren County farmer Fred Vonderhaar.

“This is a strictly voluntary deal. If you’re not happy with the program, don’t participate,” he said.

Vonderhaar rents about 1,500 acres to farm corn and other commodities between Mason and Lebanon. He received more than $900,000 in federal farm subsidies from 1995 to 2009 and is in the top 10 of top recipients in Warren County during that time, according to EWG.

He said the EWG database includes temporary loans given to farmers to store their harvests over winter and sell at a higher price in the spring.

The low-interest loans are paid back to the banks after the sale. Vonderhaar said the loans represent “a small part” of his subsidies, estimating the loans to be less than half of the total amount.

Vonderhaar said the market for corn, soybeans, grain and other farm-raised commodities is volatile and subsidies are needed to keep farmers on an “even keel.”

“It keeps me in business just in case mother nature throws me a high heater that I can’t handle,” he said.

The excessive rain this year has pushed planting back a month. That has pushed prices up for corn to about $8 a bushel.

Vonderhaar said the corn price recently dropped a dollar in a week for no reason except speculators adjusting prices.

Vonderhaar is pessimistic about this year’s crops. He said a dry summer could devastate potential yields, and farmers may need to file for disaster subsidies, which helps farmers pay operating costs in years when crops fail.