Another reason to worry about the new multi-billion dollar "permanent disaster program" Senators Conrad and Baucus have strong-armed into the farm bill--and there are plenty of reasons to worry already. From Time Magazine:

Disaster Relief: A new program to compensate farmers hit by drought or flooding could get $3.8 billion over four years. Farmers now get emergency aid for disasters like flood or drought on a case-by-case basis, but payments can take years. Sen. Kent Conrad, a North Dakota Democrat, says the new program would allow farmers to borrow more money more quickly, and plant "fence row to fence row" to "give us a market response to these high prices."

That strategy worked out so well for North Dakota and other farm states last time--in the early 1970s, when Earl Butz told rural America to plant fence row to fence row--that farmers plowed up the Mall in celebration. And if you think trying harder to grow crops in North Dakota with government money to help you do it is a good idea, get a load of this map.

The truth is, Democrats in Congress don't know what to do or say about the food price run up story that is picking up a political head of steam. They have nothing to offer in the farm bill context, save a modest increase in the food stamp program. They were, and are, majority owners of the ethanol boom, which has hitched our food system to our fuel system in some extremely worrisome ways. But most Democrats--with the exception of the reliably honest and courageous Dick Durbin--point fingers only at rising energy prices, not at their own decision to rush headlong into corn-based ethanol before asking (much less answering) the most rudimentary questions about how it might affect the stability of the food system or the environment.

But if the bad weather continues in the Corn Belt during planting (too wet) and extends into summer (too dry), we could see truly dramatic increases in food prices right before the election. Where do you think all the fingers will be pointing then?

Make that a travesty of a mockery of a sham of a mockery of a travesty of two mockeries of a sham--to borrow a Woody Allen phrase.

It is particularly an outrage that Democrats would support these "caps", and that some Democrats are calling the proposal "serious reform", to boot. Then again, so many Democrats have done the business of the subsidy lobby throughout this farm bill debate.

Let's all jump in a taxicab, call a school teacher or a fireman or a soldier we know, or just walk up to someone on the street and see what they think about the "reforms" the Democratic Congress is proposing to limit farm subsidies to the wealthy.

Non-farmers now getting subsidies will be disqualified only if they have an adjusted gross income (income after most deductions) in the stratospheric range of $750,000 or more (averaged over three years I presume) in 2010.

The "cut-off" will drop after that ($650,000 in 2011 and $500,00 in 2012).

However, if it's farm income we're talking about, the "cap" is not a travesty of a mockery of a sham. It's a farce of a masquerade of a burlesque of a whoopee cushion.

Farm-derived income would be "capped" (as in "gimme cap") at $950,000, meaning huge operations could still make that much before they are dinged in any way on subsidies.

And here--imagine the sound of the teeniest, tiniest little bell ever--is the ding!: For each $100,000 per year these giant farmers make above that amount, they will lose 10 percent of their direct payments only. Which payments, it has been reported, will be raised to $50,000 per person (up from $40,000 in current law) or $100,000 per couple ($80,000 in current law).

So let's say you had $100,000 in DPs coming your way. To lose it all, you'd have to have farm income of $1.9 million.

If this is the offer that comes forth tomorrow, the White House will promise a veto.

Will that be political suicide, as Chairman Peterson said today to farm broadcasters? I think so.

But for Democrats, not for Bush. And he should veto it.

As we've said before, there is plenty of money in this bill to increase food stamps, conservation, and other priorities. Democrats just have to demonstrate the political backbone to face down the subsidy lobby.

If Democratic leaders can't do that now, when subsidized farmers are making record profits from the market, they'll never do it.

The SF Chronicle has stayed right on top of the farm bill soap opera all year long with hard hitting coverage on both the news and editorial sides. Here's the latest from Carolyn Lochhead ("New farm bill retains big crop subsidies").

Prominent Los Altos developer John Vidovich and various family members in the Sandridge Partnership of Sunnyvale were the nation's biggest recipients of automatic government payments to farmers last year, receiving more than $1 million, according to a new analysis of federal data by Environmental Working Group.

. . .The payments are heavily weighted to the biggest producers, with the top 10 percent getting two-thirds of the subsidies.

Ken Cook, president of Environmental Working Group, which opposes the subsidies, drew a contrast between the $1,064,134 payment to Sandridge Partners and the $600 economic stimulus payments now going out to taxpayers.

"Congress is about to be grotesquely generous to big, subsidized farms that are now enjoying unprecedented prosperity," Cook. said. The list of recipients for payments last year "makes clear the disturbing degree to which congressional leaders are catering to the powerful farm subsidy lobby at the expense of ordinary American taxpayers."

The payments will continue to go out automatically under a new $300 billion farm bill Congress has in the works, despite an 80 percent rise in grain prices over the past three years.

Steven Mufson writes in today's Washington Post about the ethanol boom and its broad impact on food, energy, and the environment.

Rising food prices have given Congress and the White House a sudden case of legislative indigestion. In 2005, the Republican-led Congress and President Bush backed a bill that required widespread ethanol use in motor fuels. Just four months ago, the Democratic-led Congress passed and Bush signed energy legislation that boosted the mandate for minimum corn-based ethanol use to 15 billion gallons, about 10 percent of motor fuel, by 2015. It was one of the most popular parts of the bill, appealing to farm-state lawmakers and to those worried about energy security and eager to substitute a home-grown energy source for a portion of U.S. petroleum imports. To help things along, motor-fuel blenders receive a 51 cent subsidy for every gallon of corn-based ethanol used through the end of 2010; this year, production could reach 8 billion gallons.

Now, however, the legislation is being criticized for making food more expensive while gasoline prices continue to climb.

Legislative indigestion indeed. This is a must read for anyone concerned about America's energy and food policy.

Full story here.

EWG Report: The Unintended Environmental Impacts of the Current Renewable Fuel Standard (RFS)

Mary Clare Jalonick's account tonight jives with Chuck Abbott's:

House and Senate negotiators late Tuesday scrambled to meet President Bush's demands on a multibillion-dollar farm bill, considering cutting subsidies for wealthy farmers.

Earlier in the day, Bush had renewed his call to reduce such subsidies, saying the "massive, bloated" bill would do little to stem rising food costs. Negotiators met with Agriculture Secretary Ed Schafer soon afterward.

That meeting was "sobering," said Sen. Kent Conrad, D-N.D. He said the Bush administration had a laundry list of demands for the legislation, which lawmakers were hurrying to finish before current farm law expires Friday. The law has been extended several times, and lawmakers have said another one-week extension may be necessary.

She focused on the issue of AGI, citing President Bush's Tuesday morning press conference:

"The bill Congress is now considering would fail to eliminate subsidy payments to multimillionaire farmers," [President] Bush said. "America's farm economy is thriving. The value of farmland is skyrocketing. And this is the right time to reform our nation's farm policies by reducing unnecessary subsidies."

House Agriculture Committee Chairman Collin Peterson, D-Minn., said last week that lawmakers were considering an eventual limit on payments to high-earning "nonfarmers," people who make only a small portion of their income from farming. But that wouldn't impose any income limits on wealthy farmers, Peterson said then.

Conrad said Tuesday that the bill now would have "substantial reform" for farmers and nonfarmers.

Chuck Abbott at Reuters is reporting just now that key farm bill conferees moved tonight in the White House's direction on some issues, such as lowering the adjusted gross income limit for subsidy eligibility. How far we don't know. One rumor is that anyone with an AGI above $500,000 three years running, regardless of source, would be disqualified from farm subsidy programs. Until today, we've heard that the conference leaders were settling on a $500,000 AGI limit, but that it would only disqualify part time farmers or non-farm income.

House Agriculture Committee Chairman Peterson recently has been quoted as saying full-time farmers should not be affected by AGI limits because Congress shouldn't be dictating limits on farm size. Unless it comes to dictating when a farm is too small to be a farm. Chairman Peterson has proposed to cut off subsidies to small farms of 20 acres or less. In fact, he doesn't think farms that small should even be counted in the Census of Agriculture.

We think means testing makes enormous sense for farm subsidy programs. The current level--$2.5 million AGI unless you're a full-time farmer--is a joke, as were the only moderately less risible variations that passed the House and Senate last year.

But even the original AGI proposed by the administration (hard cap of $200,000 average over three years regardless of income source), which we strongly supported, needed to be combined with much lower caps on payments regardless of income, a la Dorgan-Grassley, which we also strongly supported. Both would have to be well-constructed and rigorously enforced to produce the results we need. But to our mind that was the reform package we needed in this cycle. It was in the Kind-Flake proposal defeated on the House floor. The subsidy lobby has fought hard against both ideas.

We'll know a lot more about this tomorrow, finally, I expect.

From today's EWG Release:

As Congress Finalizes Farm Bill Deal EWG Lists Recipients of

Controversial Direct Payment Subsidies for 2007

Washington, DC, April 29--By any measure, 2007 was a banner year for farmers of grain, soybeans and cotton, as high prices for their crops earned them record net income, even after they paid skyrocketing costs for fuel, fertilizer and seed.

But under formulas set by Congress in the 2002 farm law, taxpayers topped off the record farm earnings of 2007 with another $5 billion in "direct payment" crop subsidies.

The names of the direct payment subsidy recipients and the amount they received in 2007 were released online today by Environmental Working Group (EWG).

As Americans begin receiving a few hundred dollars of their own money back from Washington this week in one-time tax rebates, some of which they'll spend to cover rising food costs, Congress is finalizing a plan to send far more generous direct payment subsidies to some of the largest, most prosperous farms in the nation every year over the next five years.

"Though net farm income reached a record level of $88.7 billion in 2007, propelled by high market prices for major crops, Washington still sent out over $5 billion of taxpayers' money in "direct payment" farm subsidies to over 1.4 million recipients," said Ken Cook, president of EWG. "Over 60 percent of the subsidy was pocketed by just 10 percent of the recipients-the largest and generally wealthiest subsidized farming operations in the country."

Farm income exceeded $84,000 per household on average in 2007, compared to a 2006 average for all U.S. households of $66,000.

"Congress is about to be grotesquely generous to big, subsidized farms that are now enjoying unprecedented prosperity, including double-digit increases in farmland prices," said Cook. "The list of farm subsidy beneficiaries we're publishing today will make clear the disturbing degree to which congressional leaders are catering to the powerful farm subsidy lobby at the expense of ordinary American taxpayers, while shortchanging other vital national needs," Cook said.

Direct Payment 2007 Data - http://farm.ewg.org/farm/dp_analysis.php

# # #

Environmental Working Group is a nonprofit research and advocacy organization that uses the power of information to protect the environment and public health. EWG's Farm Subsidy Database has been searched over 102 million times since Nov. 2004.

``It's not the time to ask American families who are already paying more in the checkout line to pay more in subsidies for wealthy farmers,'' declared House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid in a joint statement issued today.

Yeah right. Democratic leaders in Congress didn't say anything remotely resembling that today, or any time over the past year, for that matter.

That quote comes from President Bush this morning during a Rose Garden press conference.

Here's the story, from Bloomberg's Alan Bjerga.

Update: Bush's full remarks.

Americans are concerned about rising food prices. Unfortunately, Congress is considering a massive, bloated farm bill that would do little to solve the problem.

The bill Congress is now considering would fail to eliminate subsidy payments to multimillionaire farmers. America's farm economy is thriving. The value of farmland is skyrocketing. And this is the right time to reform our nation's farm policies by reducing unnecessary subsidies.

It's not the time to ask American families who are already paying more in the checkout line to pay more in subsidies for wealthy farmers.

Congress can reform our farm programs, and should, by passing a fiscally responsible bill that treats our farmers fairly and does not impose new burdens on American taxpayers.

So long as it's chump change.

Jim Wiesemeyer at AgWeb reinforces a suggestion we heard last night. The supposed 2 percent 'cut' in direct payments over four years that was announced yesterday as yielding (a pitiful) $400 million in savings will actually result in only $200 million in subsidy reductions.

Why? Evidently CBO determined that fresh expenditures under the new 'average crop revenue program' provision in the bill will offset half of the direct payment savings.

In other words, about half the money that comes out of a subsidized farmer's direct payment pocket through the 2 percent 'cut' will be slipped back into his brand new 'average crop revenue' pocket.

Neat, huh? And don't forget, direct payments apparently are fully restored in the fifth year of the bill.

EWG will be publishing the names of 2007 direct payment recipients, and the amount they received, on Tuesday. That's about a year ahead of our normal schedule. We usually wait for commodity certificate and other loan transactions to clear through the calendar year.

But with direct payments looming so large in this farm bill, and the debate coming to a head this week, we had our computer wiz Chris Campbell dig $5 billion in 2007 direct payments out of the data pile for early publication.

How did he do it? For those of you with a technical bent, Chris got behind the wheel of this baby:

The new data should help reporters and the public put the farm bill deal in perspective this coming week. Reporters will be able to get reaction to the farm bill from direct payment subsidy recipients, many of whom are prospering as never before from high crop prices. And taxpayers will be able to compare direct payment handouts with their dinky little economic stimulus checks--which, knowing taxpayers, they'll probably run right out and blow on extravagances like food, gas and housing.

U.S. Rep. Kind (D-WI): Statement on farm bill deal

“While I have not seen the details of the supposed farm bill agreement, from what I have seen, this deal looks like a nightmare for those who were hoping for a better farm bill. Negotiators managed to avoid every opportunity to reform wasteful, outdated subsidies while piling on additional layers of unnecessary spending. It looks as though nothing has been done to address the waste and abuse that has been well documented over the last year. Clearly, more could be done to focus farm payments on those who truly need them and divert money to other priorities. I will continue to use every opportunity available to join with other reform-minded Members of Congress to push for a better deal for Wisconsin’s family farmers and taxpaying citizens, and I hope the President will stand firm in his commitment to a better bill.”

EWG sent this media advisory out Friday afternoon, in anticipation of the House-Senate conference 'deal' on the farm bill. About which, more later.

WASHINGTON, April 25 – Although net farm income reached a record level of $88.7 billion last year propelled by high market prices for major crops, Washington still sent out over $5 billion of taxpayers' money in direct payment farm subsidies to over 1.4 million recipients. Over 60 percent of the subsidy was pocketed by just 10 percent of the recipients.

The names of individuals and businesses that collected the money, and the amount they received in 2007, will be published online Tuesday, April 29 by Environmental Working Group at www.ewg.org.

EWG is publishing the direct payment subsidy information to inform public consideration of the 2008 Farm Bill. The bill is expected to be finalized by Congress in the next week, following months of delays and five emergency extensions of the expiring law.

Direct payment subsidies are provided without regard to the economic need of the recipients or the financial condition of the farm economy. Established in 1996, direct payments were originally meant to wean farmers off traditional subsidies that are triggered during periods of low prices for corn, wheat, soybeans, cotton, rice and other crops.

The farm subsidy lobby has insisted the payments continue even when crop prices and farm income are soaring.

Farm income exceeded $84,000 per household on average in 2007, compared to a 2006 average for all U.S. households of $66,000.

Senate Agriculture Committee Chairman Tom Harkin, who has sought without success to shift direct payments to other farm bill priorities, told The New York Times last week that direct payments are "like the black hole in space that astronomers talk about: everything gets sucked in and nothing ever comes out. . . . This is the black hole of agriculture. It doesn’t make sense, but farmers continue to get it.” According to the Times, "Mr. Harkin said there was not much he could do because 'I don’t have the votes,” adding, “People love free money.'”

"This Congress has done almost nothing to help ordinary Americans cope with record gasoline prices, skyrocketing electricity bills, rising food costs, widespread job lay-offs, and an epidemic of home foreclosures," said Ken Cook, president of Environmental Working Group. "About all Washington has managed to do is give taxpayers a few hundred bucks of their own money back, through a one-time tax rebate.”

"But when the farm subsidy lobby comes calling on Capitol Hill, it's a different story," Cook added. "Even when farmers are making record amounts of money, Congress gives them even more, instead of giving taxpayers a break or redirecting the money to pressing needs like food assistance, healthier school lunches and conservation. While Congress is considering increased funds for all of these areas, the increases will be limited and insufficient because the farm subsidy lobby's needs trump all others."

Cook said negotiations over a new farm bill are likely to yield five more years of windfall payments to the largest, wealthiest farmers in the country because congressional leaders have been unwilling to stand up to special interest farm groups.

"From every indication, Congress is about to be grotesquely generous to big, subsidized farms that are now enjoying unprecedented prosperity, including double-digit increases in farmland prices. The list of farm subsidy beneficiaries we're publishing Tuesday will make clear the disturbing degree to which congressional leaders are catering to the powerful farm subsidy lobby at the expense of ordinary American taxpayers, while shortchanging other vital national needs," Cook said.

# # #
CONTACT: Don Carr, EWG, (202) 667-6982 or don@ewg.org

Environmental Working Group is a nonprofit research and advocacy organization that uses the power of information to protect the environment and public health. EWG's Farm Subsidy Database (http://farm.ewg.org/farm/) has been searched over 102 million times since Nov. 2004.

That's according to David Rogers at Politico (April 10 edition).

That's just about one-quarter of the $2.5 billion tax cut package added on the Senate floor during the farm bill debate last year. This provision was evidently pushed by Minority Leader Mitch McConnell (R-KY).

Known as the "Equine Equity Act," the measure is a package of capital gains and depreciation tax breaks, and you can bet most of the benefits would go to a handful of large, wealthy thoroughbred horse owners. It is a legislative priority for the National Thoroughbred Racing Association.

In terms of impacts on government spending or revenue loss, this tax break dwarfs the investments this farm bill will be making to give black farmers who have been discriminated against by USDA a chance to have their case heard on the merits ($100 million), all investments the bill will make in organic agriculture, and federal spending for a number of conservation programs.

If anyone else has helpful comparisons, please chime in.

Okay, so we are in the midst of the first global food crisis in 30 years--complete with food riots, political instability, and full-on alarms being sounded by the World Food Program, World Bank, and others. And we face the prospect of a further run-up in prices this summer and fall. Sam's Club is rationing rice, for goodness sake. The Food Stamp Program rolls are swelling as low-income Americans scramble to feed their families. We are witnessing a growing environmental disaster as farmers plow out prairie and conservation lands here and rain forests abroad to turn food into vehicle fuel. The commodity markets don't seem to be working--at least not for farmers--though speculators seem to be doing fine. And despite record net farm income now and for the forseeable future, taxpayers will still be sending $5.1 billion per year to the most prosperous subsidized farms in the country, 10 percent of whom will collect two-thirds of the money.

But how do these problems stack up against the plight of thoroughbred horse owners? David Rogers at Politico:

After months of wrangling, House and Senate tax writers appear confident of reaching a deal soon that will clear the way for passage of a long-delayed farm bill.

Speaker Nancy Pelosi (D-Calif.) has softened her opposition to Senate-backed tax cuts, and there appears to be tentative acceptance of a revenue-neutral package of at least $1.4 billion over 10 years.

The Senate is pressing to go higher. Among the major issues still pending are tax breaks for timber interests and the thoroughbred industry, which has a powerful champion in Senate Republican leader Mitch McConnell (Ky.). After so much bitterness, no one is yet ready to claim success, but the talks have taken on a more optimistic tone.

Sound like a lousy deal? Sound like everything you think Democrats should not stand for, now that they're in charge?

Maybe you're not seeing the forest for the stumps. Greg Hitt in today's Wall Street Journal:

A push is under way on Capitol Hill to add timber-industry tax breaks to the farm bill, which includes calls to spend billions on such items as wheat subsidies and school lunches.

Montana Democrat Max Baucus, the chairman of the Senate Finance Committee, is among the senators backing a tax measure that is a top legislative priority for Weyerhaeuser Co. and the forest-products industry.

The proposal would eliminate tax disparities among timber competitors, and would create a new deduction that effectively lowers Weyerhaeuser's top income-tax rate to 15% from 35%. The deduction could be claimed widely, but would specifically address the economic challenges facing Weyerhaeuser. Industry analysts suggest the measure could save the Federal Way, Wash., company more than $100 million a year.

Today we updated our farm bill pro-reform editorial map. The tally now stands at 411 reform minded editorials published in American dailies since January 1st, 2007. After the jump I break down some of the papers pushing hard for a change in the inequitable and wasteful farm subsidy system.

Cross posted on Enviroblog.

Reps. Ron Kind and Earl Blumenauer have been at the forefront of efforts to rein in abuses in the farm subsidy system and invest the savings in priorities like conservation, organic agriculture, rural development and smarter biofuels.

Yesterday they wrote a great op-ed in The Hill with eminently sensible ideas for both finding money the farm bill conferees need and addressing reforms that make sense in farm country ("To help advance farm bill, stop subsidizing millionaires").

Congress is overdue for a new farm bill. Thankfully, there is a way out of the budget standoff that has plagued negotiations. By making simple changes to the bill’s most outdated and least justifiable programs, the Conference Committee can free up enough money to fund all the increases in other areas for which our constituents are clamoring. By doing this the right way, this farm bill can be the great conservation bill and healthy food bill of the 21st century.

In February, we outlined 10 simple steps to making our farm programs more fiscally responsible, less market- and trade-distorting, and more reflective of our national priorities. These included:

• Lowering the income limit for receiving government handouts below the $900,000 currently under discussion.
• Adding a strict means test to the direct payment entitlements, which currently are distributed regardless of whether farmers need them or not, or even if they farm at all.
• Putting real caps on the amount of subsidies an individual farmer can receive.

While some have criticized President Bush’s tax cuts to the wealthiest Americans, it seems to us that the farm bill also would be a good place to look.

The only thing that could make this worse politically would be a jump in food prices right before elections this fall. . .

That's the question that pops up from the Bush statement issued just now.

Of course, a straight extension would create a firestorm on the Hill because it would mean no increases for nutrition, conservation or specialty crops--or the disaster package in the Senate bill.

I doubt a straight extension could pass the House, and perhaps not the Senate.

It may be that with this statement the administration is positioning itself to wring concessions from the subsidy lobby right now, in return for signing the extension, with more negotiating to follow. Makes sense for them to try.

President Bush Disappointed by Congress’ Failure on Farm Bill

White House News

I am disappointed that Congress has failed to put forward a good farm bill, leaving farmers and ranchers in a state of continued uncertainty as to how they will be affected by Federal policies.

The farm bill proposal currently being discussed by conferees would fail several important tests that I have set forth. With record farm income, now is not the time for Congress to ask other sectors of the economy to pay higher taxes in order to increase the size of government. The proposal would increase spending by at least $16 billion, masked in part by budgetary gimmicks and funded in part by additional tax revenues. These tax revenue provisions are unacceptable - including tax compliance initiatives being considered by the House and Senate Conference Committee. As important, the proposal also lacks the important reforms I've repeatedly called for.

After last week's short-term extension of the farm bill, Congress now has only four days to provide certainty to America's farmers and ranchers. Despite the passage of more than a year since my Administration unveiled a responsible and forward-looking farm bill proposal, there are no signs that the conference committee will reach agreement on an acceptable farm bill by Friday. I therefore call on Congress to provide our agricultural producers with the certainty to make sound business and planting decisions about this year's crop by extending current law for at least one year.

Yes, big trouble--if it's grain or oilseed-based organic, such as the dairy, poultry and cereals goods segments, which happen to have been among the fastest growing (and more prosperous) markets in the industry.

As I told Andy Martin for his April 18 piece (with Kim Severson) on organic in the NYT ("Sticker Shock in the Organic Aisles"), we could be seeing a contraction in the organic industry for the fist time in over a decade as a result of an acute shortage, and extremely high prices, for organic corn, small grains, and soybeans.

An insider in the organic grain and oilseed trade told me last week we're now importing upwards of 40 percent of our organic soybeans from China, along with a good deal of our organic livestock meal. Food companies are wondering if they should discontinue product lines not just because commodity inputs are pricing them out of the market, but because they just can't find the grains and oilseeds they need.

The pressure on organic was a major theme of my talk last Tuesday at Canlis, a fantastic restaurant in Seattle, at a wonderful evening event sponsored by our friends at Organic Valley Family of Farms.

As I've been noting the past year, the organic grain and oilseed industry in this country was shockingly small before the run up in prices for ag commodities. How small? Probably about one- or two-tenths of one percent of grain and oilseed acreage is certified organic. Bear in mind, for the organic industry as a whole, we're looking at about 4 million certified acres for crops and livestock out of about 800 million acres nationally--or about one-half of one percent.

Now the organic grain/oilseed base is probably shrinking further in both absolute and percentage terms. This same trader told me several big organic grain growers for the company shifted, with regret, to conventional recently, drawn by the higher profits. Recruitment of conventional grain farmers to go organic has become essentially impossible.

What's more, organic growers had hoped that if land now in the federal Conservation Reserve Program were to come back into crop use, it could provide a ready source of acreage for expansion of organic grain and oilseed production. Proper management that avoided chemical weed control in the last three years of the 10-year contracts would make CRP ground eligible immediately for organic certification, without the need for conventional farmers to absorb the income hit common during the 3-year transition to higher organic prices.

But land coming out of CRP now is going into conventional production instead.

The problem in the grain belt isn't big organic. It's no organic. Or almost no organic.

Martin and Severson reported the same phenomenon at work with dairy farmers (and I've spoken to organic dairy farmers who've told me the same thing):

Doug Hartkopf, a dairy farmer in Albion, Me., said the high feed costs forced him to stop farming organically in December.

“Instead of paying $3,000 a month, I was paying $7,000,” he said. “It was a very tough decision. It was something we had to do.”

In all, at least 25 dairy farmers in the Northeast have retired early or stopped farming organically in the last six months, said Ed Maltby, executive director of the Northeast Organic Dairy Producers Alliance. He predicted that the shifts would continue unless farmers received a price increase of about 25 percent from milk processors.

The high grain prices are squeezing more than just organic dairy farmers.

“In the last three months or four months, everyone along the chain in organic food is not making their margins,” said Bob Eberly, president of Eberly Poultry in Stevens, Pa. The cost of raising poultry has increased 16 percent in the last six months, but he said his prices had increased only 7 percent.

“In the next month or so, our customers are going to see a significant price increase,” he said. “We just have to do it.”

And let's hope consumers stick with organic through the sticker shock. I think it's worth it--but as my friend Phil Landrigan, an organic enthusiast, once said, "Organic is private school for food." Great if you can find it, great if you can afford it. But the ranks of those who can't find or afford it will be expanding in the months ahead.

Organic has long seemed isolated from the rest of agriculture by virtue of its distinctive practices and the higher price structure for organics at every level. Now we see the sector is not so isolated from forces like the ethanol boom, and that, in fact, organic in this country is highly vulnerable to the food price conditions we now face.

Also apparent is the cost of Congress' consistent failure, repeated again in the 2008 farm bill, to dramatically increase investments in the organic research, development, and marketing infrastructure needed to grow the sector. For all the potency of its cultural and commercial imprint, at its current scale organic still occupies a small fraction of the U.S. agricultural landscape, still contributes modestly to our public health.

Our fear at EWG is that this small, hopeful part of the U.S. food and agriculture system may get smaller over the next few years. That's not the direction organic should be headed in.

From today's EWG news release:

In Recession, Modest Help for Most Americans, But Big Bucks for Big Farms

Over the next few weeks, some American couples will get $1,200 of their own money back from Washington. This is the maximum, one-time tax rebate Congress provided last February in their desperate attempt to revive our faltering economy that has since been declared in recession.

By contrast, in a few months some other American couples, who operate some of the largest, most profitable farms in the country or merely own huge swaths of farmland, could be receiving 100 times that amount from the government--$120,000. That’s what could happen if the House version of the 2008 farm bill becomes law later this week.

What’s more, $120,000 will just be the first of five guaranteed annual crop subsidy payments that will bring them $600,000 through 2012.

The disparity owes much to the decades-old momentum behind farm subsidies which delivered $13.4 billion to farmers in 2006, according to the latest update of the Environmental Working Group’s Farm Subsidy Database website (site and analysis).

Now including 2006 USDA data, the new website shows that from 1995 to 2006 or the past 12 years, taxpayers have sent over $177 billion in subsidies to farmers. Taxpayers will continue to send billions more, even as the farm economy posts record prices for many crops, and record incomes for most farmers.

To put this crop subsidy largesse in perspective, at median home prices reported by the National Association of Realtors for the last quarter of 2007, $600,000 would buy eight or more homes in places like Youngstown, OH, Saginaw, MI and Decatur, IL.

Under the House bill, a couple receiving the new maximum direct payment ($120,000 per couple per year or $600,000 for 5 years) will receive taxpayer dollars equivalent to five or more median-priced houses--one per year--in 26 metropolitan areas.

Without the increase in the subsidy limit from the House bill and merely an extension of the current maximum payment of $80,000 per couple per year over five years ($400,000 total), you could still buy 3 or more median-priced homes in 44 metro areas.

"You can't have a policy discussion in Washington without asking, how will it play in Peoria?" said Ken Cook, president of the Environmental Working Group.

"That will depend on how people living there feel about big farmers all around them, raking in record incomes and still getting enough in subsidies to buy three median-priced Peoria homes with the existing direct payment limit over five years," Cook added.

"If the House bill becomes law, big farmers would be able to buy 5 median-priced Peoria homes since it, gives couples an extra $40,000 each, every year for the next five. We can imagine how the American public may respond to the stunning unfairness of such a policy," said Cook.

Other findings:

Top 2006 Recipients – Riceland Foods, a rice cooperative, received $7.7 million in 2006.

Corn is King – Over the past twelve years, taxpayers have spent $56 billion on corn subsidies paid to over 1.5 million recipients, making it the top crop for federal assistance.

Concentration of Payments – 50% of all subsidies go to just 9 states while 22 of the nation’s 435 congressional districts collect over half of all subsidy payments.

Senate and House Agriculture Committees – The 19 states currently represented on the Senate Agriculture Committee take home 59 percent of all subsidies paid over the last 12 years while the 45 congressional districts currently represented on the House Agriculture Committee accounted for 42 percent of the national subsidy total.

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Cross-posted from Enviroblog.

When you speak, as we often do, in parts per million, it can be hard to have a sense of what that means. For example, did you know that measurements of just 0.1 ppm of ammonia in water can cause problems for fish and other aquatic life?

So naturally when scientists found upwards of 2.0 ppm of ammonia in major Iowa streams this spring, they were concerned.

The extremely high levels were caused by a combination of agricultural chemicals and heavy ice cover. Apparently, much of the ammonia that would have ended up in the atmosphere was trapped by the ice and became runoff during spring thaw. In and around Des Moines, water officials had to turn to alternative sources to supply the city's water.

Ammonia runoff like this happens every year, apparently, but it isn't usually this bad. Of course, there's an easy way to fix the problem: don't apply fertilizer to frozen or snow-covered land. You'd hope that, as good stewards of the land, farmers would follow state guidelines that say as much of their own accord. Clearly that hasn't worked so far, and now politicians are considering an outright ban on the practice. Of course, in Farm Country, any regulations relating to agriculture are notoriously difficult to get through -- and regulations to protect the water supply likely won't be any different.

But who needs clean drinking water, anyway?

Photo by burnt in effigy.