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Billionaires Received U.S. Farm Subsidies, Report Finds

Ron Nixon
Thursday, 7 Nov 2013 | 11:08 AM ET
John Kelly | Getty Images

The federal government paid $11.3 million in taxpayer-funded farm subsidies from 1995 to 2012 to 50 billionaires or businesses in which they have some form of ownership, according to a report released Thursday by the Environmental Working Group, a Washington-based research organization.

The billionaires who received the subsidies or owned companies that did include the Microsoft co-founder Paul G. Allen; the investment titan Charles Schwab; and S. Truett Cathy, owner of Chick-fil-A. The billionaires who got the subsidies have a collective net worth of $316 billion, according to Forbes magazine.

The Working Group said its findings were likely to underestimate the total farm subsidies that went to the billionaires on the Forbes 400 list because many of them also received crop insurance subsidies. Federal law prohibits the disclosure of the names of individuals who get crop insurance subsidies, the group said.

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The report is being issued as members of the House and Senate are meeting to come up with a new five-year farm bill. The authors of the report said it is timely, given that lawmakers are debating a House proposal that would cut nearly $40 billion over 10 years from the food stamp program, which helps provide food for nearly 47 million people. A Senate provision would cut $4.5 billion over the same period.

A report released Wednesday by the Center for American Progress, a left-leaning research group, found that food stamps kept about five million people above the poverty line last year. The food stamp program was cut by about $5 billion on Nov. 1 when a provision in the 2009 stimulus bill that added funding for the program expired.

"The irony is that farm subsidies are going to billionaires at the same time that there are proposals to kick three to five million people off of food stamps," said Scott Faber, vice president for government affairs at the Environmental Working Group. "This clearly highlights the need for reform to our farm programs."

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Some of the company officials identified by the Working Group said they were surprised to find their names in the report.

Don Millican, the chief financial officer at the Kaiser-Francis Oil Company in Tulsa, Okla., which is owned by the oil and banking magnate George Kaiser, said he did not know why the company was shown as receiving crop subsidies.

The Working Group report shows the oil company received about $17,500 in subsidies for wheat, sorghum and barley from 1996 to 2003. Forbes puts Mr. Kaiser's net worth at $10 billion.

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"It's possible we could have gotten the surface rights to land that was being farmed and that's why we were listed as getting subsidies," Mr. Millican said. "It's rare, but it happens."

Other companies listed in the report declined to discuss its findings.

Allen D. Israel, a lawyer for Kona Residence Trust in Seattle, which is owned by Mr. Allen, said the company would not comment on its farm subsidies. Mr. Allen's net wealth is estimated at $15.8 billion, according to Forbes.

The trust received about $14,426 in crop subsidies for barley from 1996 to 2006, the Working Group's report said.

Mr. Faber said that one of the proposals he found most disturbing in the farm bill would shift money from farm subsidy programs like direct payments, which have income limits, to those like crop insurance, which do not. Other measures would subject food stamp recipients to drug testing, work requirements and income means-testing.

Unlike traditional farm subsidies, crop insurance premium subsidies are not now subject to income requirements, payment limits or conservation compliance, the Working Group found.

(Read more: Farmers fighting old foe: Unions)

"So basically the bills would allow billionaires to get even more in subsidies, all without taxpayers knowing who they are, while imposing draconian requirements on low-income people," Mr. Faber said.

According to the Working Group's analysis, more than 40 billionaires own properties where crops are grown that are among the most likely to be insured through the federal program, including corn, soybeans, wheat, cotton and sorghum.

—By Ron Nixon of The New York Times

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