Study: Calif. farms get millions in fed water and crop subsidies

Riverside Press-Enterprise - 8/3/05
Posted by Tom Stokely




The study released Tuesday by Environmental Working Group found that the
6,800 farms in the Central Valley Project, the nation's largest federal
water supply project, received $538 million in combined water and crop
subsidies in 2002, the last year in which both figures are available.

The analysis found that nearly one fifth or 1,228 of Central Valley
farms "double-dipped" in 2002, receiving water subsidies worth $122
million and crop subsidy checks for another $122 million. Some dairy
farmers "triple dipped" using subsidized water to grow subsidized corn
to feed cows that produce subsidized milk or cheese.

"What was intended to be a support program for small family farmers has
turned out to be a corporate welfare program for big agribusiness
operations," said Bill Walker, vice president for EWG's West Coast
office, which conducted the analysis. "When you add all of the other
federal water projects around the West, it's clear that the Central
Valley Project can only be the tip of the iceberg."



But the state's farming interests disputed the study's findings. They
took issue with how the study calculated the value of federal water
subsidies, and said the only break farmers get is that they don't have
to pay interest on the $3.6 billion in public money used to build the
Central Valley Project in 1936.



"The notion that people are getting rich off subsidized water on the
backs of the American taxpayer is just a completely overblown
exaggeration," said Mike Wade, executive director of the California Farm
Water Coalition.



Tupper Hull, a spokesman for the San Luis and Delta-Mendota Water
Authority, which oversees 2.1 million acres of irrigated farmland in the
San Joaquin Valley, called the study a "completely ridiculous analysis"
and said the federal government's investment in the Central Valley
Project has generated jobs, economic growth and food for the country.



"There have been enormous benefits to California and the nation by
virtue of lands that have been brought into agricultural production,"
Hull said.



An EWG study released in December found that the Central Valley Project
generated up to $416 million in subsidized water to California
agribusiness, with the top 10 percent getting two-thirds of the water in
2002. The value of the water subsidies was based on a 2003 state and
federal study that estimated the market price of San Joaquin River
water, Walker said.



The latest study matched the farm names from the water subsidy analysis
with the U.S. Agriculture Department's database of crop subsidy
recipients.



The study found that more than 1,800 farms received water subsidies in
2002 and crop subsidies for at least one year between 1995 and 2004. And
the distribution was uneven the top 5 percent received more than
one-third of the crop subsidies. The top 10 "double dippers" received
between $1.5 million and $2.7 million in combined subsidies, while the
average subsidy was about $200,000 per farm.



The EWG study comes as federal lawmakers prepare to debate the next farm
bill that will determine future farm subsidies, and the U.S. Bureau of
Reclamation drafts new water contracts for Central Valley irrigation
districts.



"These contracts make it impossible for California to plan sanely and
fairly for the water needs of the rest of the state," Walker said.



In recent years, various government agencies, politicians and watchdog
groups have criticized federal farm subsidies, but critics believe that
international pressure could force change. Earlier this year, the World
Trade Organization ruled that the U.S. cotton subsidies were unfair to
Brazilian farmers, and Uruguay farmers are considering a similar
challenge to American rice subsidies.



Rep. George Miller, D-Martinez, an outspoken critic of farm subsidies,
said Congress should put a stop to "these unjustifiable giveaways of the
public's precious water and hard-earned money."



"It doesn't make any economic sense," Miller said, "and it encourages
waste when the rest of us are conserving water." #

http://www.pe.com/ap_news/California2/WST_AGR_Double_Dipping_Farms_19695
4CA.shtml
*************************************************
>From http://www.ewg.org/

FOR IMMEDIATE RELEASE: August 3, 2005

CONTACT: Bill Walker or Renee Sharp, 510-444-0973
Ben Miller, office of Rep. George Miller (202) 225-2095



DOUBLE DIPPERS: HOW BIG AG TAPS INTO TAXPAYERS' POCKETS — TWICE


OAKLAND, Calif., Aug. 3 — Some of America's richest agribusinesses are
double dipping from U.S. taxpayers' pockets at a rate of hundreds of
millions of dollars a year, according to an Environmental Working Group
(EWG) computer investigation of federal crop and water subsidies to
California's Central Valley Project (CVP).

At a time of record federal budget deficits and scarce, expensive water,
thousands of Central Valley farms get cheap, taxpayer-subsidized water to
grow surplus crops the government subsidizes a second time with price
supports. EWG found that in 2002, the latest year for which figures are
available for both types of subsidies, the approximately 6,800 farms in the
CVP, the largest federally-operated irrigation system in the nation, took
in by conservative estimate $538 million in crop and water subsidies
combined.

EWG found:

More than one in four CVP farms got double subsidies for at least one year
between 1995 and 2004. Crop subsidy checks to these farms in that period
totaled more than $891 million. These farms received more than $152 million
worth of water subsidies in 2002 alone, so their combined subsidy take over
ten years could well top $2 billion.
Roughly one-third of the subsidized irrigation water the CVP delivered in
2002 went to grow crops eligible for subsidies from the Department of
Agriculture. Cotton and rice growers were the biggest subsidy sweepstakes
winners by far. These crops received one-fourth of the irrigation water and
92 percent of the crop subsidies in the system.
Some California dairy operations are not double dippers but triple dippers.
They receive taxpayer-subsidized water to grow corn, for which they receive
crop subsidies. They feed the corn to cattle to produce milk, cheese and
other products eligible for federal dairy subsidies. These triple dippers
received more than $3 million in combined subsidies in 2002.
"It's clear that double dipping is not a policy that helps struggling
family farmers make a living — the original intent of both crop and water
subsidies — but an opportunity for wealthy agribusiness corporations to
game the system so that taxpayers pay for their finished products and raw
materials," said EWG Analyst Renee Sharp, principal author of the report.

Eleven times since 1982, Congress has considered legislation to prohibit
farms from receiving both water and crop subsidies. The U.S. is under
pressure to comply with a recent World Trade Organization ruling that U.S.
cotton subsidies are illegal, and now the U.S. rice subsidy program faces a
similar legal challenge.

"California's megafarms are the most politically powerful welfare
recipients in the world," said Rep. George Miller of California, the
leading Congressional watchdog on the Central Valley Project. "first they
take public water for pennies on the dollar, then they get taxpayer
payments for their surplus crops.

"It doesn't make any economic sense, and it encourages waste when the rest
of us are conserving water. Congress needs to put a stop to these
unjustifiable giveaways of the public's precious water and hard-earned
money."

# # #

The Environmental Working Group and Environmental Working Group Action Fund
are nonprofits that use the power of information to protect public health
and the environment.


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