Taking Corporate Farmers Off the Dole

May 5th, 2011 by Phil Mattera

The signal from House Majority Leader Eric Cantor that Republicans are ready to consider cuts in farm subsidies may be a false alarm, like the one that Speaker John Boehner recently set off with regard to oil industry tax breaks.

It’s quite possible that once Cantor and his colleagues take a closer look at the agricultural giveaways, they will realize that the biggest recipients are not traditional farmers but large corporations—the GOP’s primary constituency these days.

Unlike the oil subsidies, which consist of tax preferences available to the entire industry, farm subsidies are direct payments from Uncle Sam to specific parties. A large portion of those payments go to a small number of beneficiaries. Of the $247 billion paid out since 1995, one-quarter of the total has gone to the top 1 percent of recipients, and three-quarters to the top 10 percent.

Thanks to the efforts of the Environmental Working Group—whose president Ken Cook describes the subsidy system as a “contraption that might have sprung from the fevered anti-government fantasies of tea party cynics if Congress hadn’t thought it up first”—you can go to a website and search by name or ZIP code to see exactly how much has been paid out to any individual or business.

EWG also helpfully provides various national compilations that show which beneficiaries have had their snouts deepest into the federal trough. By far the biggest cumulative winners are Riceland Foods ($554 million) and Producers Rice Mill Inc. ($314 million). These are both technically cooperatives, but there is little to distinguish them from other agribusiness giants. Riceland, with revenues of more than $1 billion, is the world’s largest rice miller and one of the country’s largest grain storage firms. It sells rice products to foodservice operators and directly to consumers.

A more interesting entry in the top ten is Pilgrim’s Pride, with cumulative subsidies of $26 million. With a history of health and safety problems, labor abuses and financial instability, it is one of the most controversial corporations in the U.S. agribusiness sector.

The company, which tends to refer to itself these days simply as Pilgrim’s (apparently, the pride is gone), was built by Texas chicken farmer Lonnie “Bo” Pilgrim into a poultry powerhouse through a series of aggressive acquisitions that began in the 1970s. Bo did not let the niceties get in the way. He once handed out campaign contribution checks to Texas lawmakers right on the floor of the legislature. His chicken plants were criticized by labor advocates for creating an epidemic of worker injuries and by animal rights advocates for treating the chickens inhumanely.

In 2002 the company had to recall a record 27 million pounds of poultry products after an outbreak of Listeria at a plant run by its Wampler Foods subsidiary. In 2007 Pilgrim’s was sued by the U.S. Department of Labor for overtime violations and later had to distribute more than $1 million in back pay. In 2008 federal officials raided Pilgrim’s plants in five states and arrested hundreds of workers for immigration violations. The company later paid $4.5 million to settle charges of hiring undocumented workers.

Saddled with debt from a $1.3 billion acquisition of rival Gold Kist, Pilgrim’s filed for Chapter 11 bankruptcy in 2008, leading to the closing of plants, the elimination of thousands of jobs and the cancellation of contracts with many of its captive farmers. In 2009 Pilgrim’s emerged from bankruptcy after being taken over by Brazilian meat mega-producer JBS, which also gained control of Swift & Company.

Federal farm subsidies have no doubt provided essential assistance to some family farmers in times of need, but too much of the money has gone to the likes of Pilgrim’s Pride. After years in which this waste has survived despite endless criticism, perhaps the time has finally come when these corporate giveaways will be curtailed.

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