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USDA begins releasing new version of farm payment data

USDA has begun releasing new farm program payment information that some believe could help set the record straight about who actually receives a wide array of farm-related government payments.

Responding to a new Freedom of Information Act request, USDA released information from the Farm Service Agency's Permitted Entity File June 9 and is scheduled to start providing information from its Section 1614 Database in August.

While expressing concerns about possible violations of privacy rights from the disclosures, farm organizations say they believe the releases may help clear up misconceptions about farm program payments, including those created by the Environmental Working Group Web site.

“Especially given identity theft concerns, American students or senior citizens would not want their names splashed in a newspaper because they received school loans, grants or social security benefits, and our farm families should have the same reasonable expectation of privacy,” said Paul Combs, chairman of the USA Rice Producers Group.

“Nonetheless, the tracking of farm payment amounts will help conclusively prove that farm critics have been resorting to distortions and half-truths when the facts do not suit them.”

Last week's release of payment information by USDA disclosed information from the Permitted Entity File, a mechanism created in the late 1970s to administer the then-new farm program payment limitation rules.

The PEF maintains records on the relationship between a parent entity and all embedded entities and individuals within them, but does not include information on how a parent entity distributes dollars among its members.

Some have criticized these arrangements, sometimes referred to as the “Mississippi Christmas Tree” because of the branching between the different entities and individuals, as a way to circumvent the payment limit rules. Others say the multiple-entity arrangements, which are legal, have kept some operations from folding in times of low prices and weather disasters.

In the past, farmer-owned cooperatives have also been singled out for negative newspaper articles and speeches on the floor of Congress because of millions of dollars in farm program payments — such as loan deficiency payments — the cooperatives actually passed on to members.

Combs said the implication has been that cooperatives receive millions of dollars in a single year and keep that payment as a single entity. “The critics fail to disclose that cooperatives are farmer-owned entities often comprised of thousands of farmer-members to whom this amount is distributed.”

Ken Cook, president of the Environmental Working Group, acknowledged that the cooperative issue has been a difficult one for his organization to handle on its often-visited Web site.

“We stopped listing the cotton cooperatives, and they disappeared from being No. 1 on the list,” he said. “We told the cooperatives they could solve the problem by listing the payments received by their members, but they didn't want to do that for business reasons.”

Entities for farm program payment purposes can include corporations, joint stock companies, associations, limited partnerships, limited liability partnerships, limited liability companies, irrevocable trusts, revocable trusts, estates, charitable organizations or similar organizations, but not cooperatives.

The 1614 database information is being compiled in compliance with Section 1614 of the Farm Security and Rural Investment Act of 2002. The 2002 farm bill says payments to farmers must be tracked directly to a person, rather than to a corporate structure, to ensure farmers are in compliance with limitations on farm payments.

The House and Senate farm bill conference committee included the section as part of a compromise with some senators and congressmen who wanted to reduce the limit on payments to $250,000 per farmer.

When completed the database will include information about the allocation of direct and indirect benefits to entities and individuals receiving payments through entities.

USDA officials say the database will include benefits issued from October 2002 to March 2006 by the Farm Service Agency, the Natural Resources Conservation Service and any other sources of government payments, totaling $85 billion.

“The data released (June 8) shows that American farm families choose to organize their farming operations in the same way and for the same reasons businesses on Main Street and American families choose to structure their operations in a particular way,” said the Rice Producers' Group's Combs, a farmer from Kennett, Mo.

“Family size, tax rules, personal liability and estate planning and farm bill participation rules help guide the farmer's decision. This is a huge blow to the critics of U.S. farm policy who have tried to paint something sinister happening.”

Combs said the aim of farm policy critics — that he called an odd alliance of political extremists on the far right and left — is to bring down a “policy that has yielded Americans the safest, most abundant and most affordable food supply in the world that costs about one-half of 1 percent of the federal budget.

“Judging by history and the global events we read and hear in the news every day, ignoring the food security of our country is foolish and arrogant,” he noted. “As ironic as it sounds, we are fortunate in this country the only real casualty so far from the ongoing assault on U.S. farm policy has been the distortion of the truth.”

The EWG's Cook said he doubts the release of the information on June 9 or the expected disclosure of Section 1614 information in August will change the basic problem of too much concentration in U.S. agriculture.

“The basic problem remains that the largest farming operations get most of the money,” he said in a telephone interview. “The real question is whether we should be broadening the program to include more farmers who have financial needs. Releasing this information will not put that debate to rest.”

Cook said he has visited southern farming operations, and “I've been impressed with what they've been able to accomplish. At some point, however, we will be forced to address the issue of whether these operations shouldn't be able to stand on their own.”

The EWG has gained considerable notoriety since it began listing farm program payment recipients on its Web site in November 2004. The Web site has a counter near the top that shows the number of “hits” since it began posting the information. On June 13, the site was showing 54.66 million hits.

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