What's in this Database?

The lists of top subsidy beneficiaries have changed dramatically. Just about every ranking of subsidy payments has changed in this new database because, for the first time, USDA has tracked subsidy benefits as they pass through tens of thousands of farm business entities-agribusiness cooperatives, partnerships, joint ventures and corporations-and has assigned virtually all farm subsidy 'benefits' to individuals. The Farm Bill 2007 Policy Analysis Database bases all of its rankings and analyses on this new benefits tracking data.

Specifically, some 358,057 individuals now have a dollar value for subsidy benefits associated with their names for the first time in our system-and they received $9.8 billion in crop subsidy benefits alone between 2003 and 2005. In the database, those individuals have a double asterisk after their name, indicating that all of their subsidy benefits were in the form of pass-through(s) from a farm business(es) in which they had an ownership interest. A single asterisk means both payments made directly and pass-through subsidies are attributed to the individual by USDA. Listings with no asterisk are for individuals or entities that received all of their subsidy directly from USDA.

The most important distinction we make in our analysis is between subsidies paid to farm businesses and subsidy benefits passed through those businesses to individuals (and, very occasionally, to other types of entities). You can see the distinction on pages like these.

The link "Top Farm Businesses, PY 2003-2005" displays the first 20 businesses, ranked by amount of subsidy payments they received from USDA in program years 2003 and 2005. Click on any farm business and you will see a list of people to whom USDA attributed subsidy benefits that were passed through to them by the respective farm business. Once you're on any farm business page you can also link back to the original Farm Subsidy Database to any relevant payment information we may have for the operation for calendar years and other programs. A separate link presents the ownership structure of the farm business that was provided to us by USDA in May, 2006 (in the so-called "permitted entity file"). However, the Section 1614 Benefits Tracking Data, the basis for our new site, does not list the intermediary businesses you see in the old database-partnerships, joint ventures, corporations and the like-or their shares of subsidy payments. It simply provides the parent farm business and any individual(s) to whom USDA attributed benefits that passed through that businesses.

The link "Top Farm Businesses, PY 2003-2005" displays the first 20 businesses nationwide, ranked by amount of subsidy payments they received from USDA in program years 2003 and 2005. Click on any farm business and you will see a list of people to whom USDA attributed subsidy benefits that were passed through to them by the respective farm business. Once you're on any farm business page you can also link back to the original Farm Subsidy Database to any relevant payment information we may have for the operation for calendar years and other programs. A separate link takes you to a feature in our original Farm Subsidy Database (2006 update) that presents the ownership structure of the farm business that USDA made public in May, 2006 through the department's "permitted entity file."

To see the difference the new Section 1614 data make, compare the following lists of "top recipients" from our original Farm Subsidy Database to the "top beneficiaries" in the Farm Bill 2007 Policy Analysis Database (and note that the latter permits quick links to the Farm Subsidy Database for farm businesses and individual beneficiaries):

Top crop subsidy recipients, United States, 2005
Original Farm Subsidy Database

Top crop subsidy beneficiaries, United States, 2005
New Farm Bill 2007 Policy Analysis Database

Top rice subsidy recipients, Arkansas, 2005
Original Farm Subsidy Database

Top rice subsidy beneficiaries in Arkansas, 2005
New Farm Bill 2007 Policy Analysis Database

Top crop subsidy recipients, Georgia, 2005
Original Farm Subsidy Database

Top crop subsidy beneficiaries, Georgia, 2005
New Farm Bill 2007 Policy Analysis Database

Cooperatives are not listed in the new database. Large cooperatives, like Riceland Foods of Arkansas, which was the top subsidy recipient nationwide in the original EWG Farm Subsidy Database, are not found in USDA's Section 1614 Benefits Tracking Database, and therefore are not listed in EWG's Farm Bill 2007 Policy Analysis Database. USDA's Section 1614 database provides data on payments made to cooperatives and passed through them to individuals and farm businesses, but does not indicate which companies or individuals are cooperative members.

USDA backgrounders Data Used in This Website (USDA backgrounders) links to USDA reference material on the Section 1614 Benefits Tracking Database. We recommend the "Questions & Answers" document in particular.

Time period and subsidies covered. The original Farm Subsidy Database now covers calendar years 1995-2005 (eleven years) of subsidy payments. The Farm Bill 2007 Policy Analysis Database you're looking at now covers program years (a USDA term of art) 2003 through 2005. USDA provided incomplete data for program years 2002 and 2006 in the underlying Section 1614 database; we have not included it. When we have complete data for program year 2006, we'll add it to the database.

The original database also covered subsidies for more programs, notably ad hoc disaster subsidies. The new database, following the congressional mandate of the 2002 Farm Bill, covers only Title I (commodity) and Title II (conservation) subsidies.

What's the difference between a recipient and a beneficiary? In EWG's farm subsidy analysis system, a recipient is a person or a farm business whose name is on a USDA subsidy check or electronic fund transfer payment. They were paid subsidies, in their own name, directly by USDA.

A beneficiary is a person or (very occasionally) a farm business that has been attributed a subsidy benefit, with a dollar value, by USDA (not by EWG) through the department's Section 1614 Benefits Tracking Database. Subsidy benefits pass through to these individuals from a farm business that has directly received the subsidy payments. The dollar value of a subsidy benefit is directly proportional to a beneficiary's share of ownership in the farm business that received a subsidy (and the business may or may not own the farm's land or other resources). Beneficiaries may or may not receive the value of their benefits as cash payments (see next topic).

Our original Farm Subsidy Database and all of its rankings and analyses was based on payments to recipients, which included individuals and all manner of farm businesses--coops, partnerships, corporations, joint ventures, trusts, estates and so forth. The new Farm Bill 2007 Policy Analysis database is based on the new Section 1614 benefits data, which we obtained from USDA in December, 2006 after a series of Freedom of Information Act requests we filed as early as 2003.

Do subsidy beneficiaries receive the benefits USDA attributes to them as cash payments? Not necessarily.

USDA has no information on how an individual or a farm business uses any of the subsidy payments they receive, any more than the Social Security Administration has information on how social security or SSI benefits are expended by recipients. As long as an individual or business meets eligibility requirements for USDA subsidy programs, they can utilize subsidy payments as they see fit-including for purposes entirely unrelated to farming. That is, the government has no rules or requirements as to how farm subsidies must be spent by an individual or business recipient. Nor do any rules require or govern cash payments, if any, from subsidized farm businesses to individuals who have been attributed benefits by USDA.

A farm business with multiple owners like this one, or even a single owner, might divide subsidies received among those owners and make cash payments in direct proportion to their ownership share-that is, in amounts equal to the benefits USDA has attributed to those owners through the Section 1614 process. Or payments might be made to those owners on some other basis, which could be unrelated either to subsidy payments to the business or ownership shares. Alternatively, the subsidized farm business might make no payments at all to owners; might provide salaries to some or all of them; or might invest all or part of the subsidy in the operation. Or the subsidy money could be devoted to purposes altogether unrelated to farming.

Why is it sometimes said that with farm subsidies, Christmas comes in July? This excellent question evidently refers to the common timing of important congressional action in farm bill cycles (July) and the fabled "Mississippi Christmas Tree" ownership structure of large farm businesses, mostly growing cotton and rice and found primarily, though not exclusively, across the South.

Historically, these very large operations included multiple owners who divided their farms into multiple businesses in order to have enough individuals to maximize per person federal farm subsidy payments, which are much higher per acre for cotton and rice, while complying with various per person payment limitations. Principal and major owners of these farm businesses (at the top of the Christmas tree) received the most payments or benefits, while owners or partners with smaller shares received lesser amounts.

In the Section 1614 Benefits Tracking Database, USDA attributes subsidy benefits to individuals that passed through any and all subsidized farm businesses that the individual has an ownership interest in. These are the businesses that received a USDA payment and are referred to as "parent entities" by USDA. USDA's Section 1614 database does not provide benefit attributions for any intermediary businesses. It simply present benefits to individuals that pass through however many farm businesses ("parent entities") the individual may have an ownership interest in.

The best way to see ownership structures (including "Mississippi Christmas Trees") is to click on the link at the top of each farm business or beneficiary page that says "Ownership structure info, 2006". That will take you to the appropriate page in EWG's original Farm Subsidy Database that displays ownership interests found in the USDA "permitted entity file" that EWG obtained in May, 2006. Note that percentages, and not dollar amounts, are listed next to farm businesses and individuals. USDA utilized the percentage ownership shares in a version of this file to attribute benefits passed through one or more farm businesses to individuals. The permitted entity data is a snapshot of farm business ownership shares that may not be in effect today, but it is the most recent, and the only publicly available, nationwide data on this subject available from USDA.

For example, this link takes you to the top subsidized farm business in Georgia for 2003-2006. Click on the top farm business - PGC Farms - and you will see the Section 1614 benefits attribution. If you go to the Analysis Links at the top of the page and click on "Ownership Structure Info 2006", a new page will open in the original EWG Farm Subsidy Database displaying the information we received from USDA in May, 2006 in the department's "permitted entity file."

While limitations still apply to some payments, making multiple owners desirable, the necessity for creating these complex ownership structures has been reduced by the advent of commodity certificate subsidies, which an individual or a farm business can receive in unlimited amounts. But search top farm business entities in any Southern state--Mississippi, for instance--and you will see many examples of operations five, ten or more owners and very substantial pass-through subsidies to multiple beneficiaries.

Or you can go to this feature of the Farm Bill 2007 Policy Analysis Database and sort farm businesses according to the number of beneficiaries to which USDA attributes pass-through subsidy benefits. For example, some 4,178 farm businesses have ten or more pass-through beneficiaries. Those firms collectively received $400 million between 2003 and 2005.

Mean Adjusted Gross Income Data For ZIP codes of Entities and Recipients. EWG obtained aggregate data from the Internal Revenue Serve on the adjusted gross income (AGI) on tax returns filed by zipcode. We matched mean AGI in each zipcode to the zipcode(s) of subsidized farm businesses and beneficiaries.

Ken Cook is president of Environmental Working Group, a public interest research and advocacy organization known for its Farm Subsidy Database. The author of dozens of articles, opinion pieces and reports on agricultural, public health and environmental topics, "[Cook's] fingerprints can be found on nearly two decades of U.S. farm law" (Omaha World Herald).