Advertisement

Secret Subsidies: Payments to farms allowed to stretch far beyond rural America, sowing concern about who gets what

Despite spending taxpayer dollars, information on how money is allocated is hard to come by
Updated: May. 17, 2021 at 4:01 PM EDT
Email This Link
Share on Pinterest
Share on LinkedIn

(InvestigateTV) - Billions of U.S. taxpayer dollars are directed each year to the country’s farms to help keep agriculture afloat when times get tough.

But the federal government is sending millions of these subsidy dollars in the names of people who live and work hundreds of miles from the farms that get the money. Though they are supposed to be actively engaged in the farm’s work, it is unclear how or if they actually are.

Through U.S. Department of Agriculture data, InvestigateTV found several people who netted farms hundreds of thousands of dollars each, despite having jobs outside of farming: over three years almost $340,000 for an NFL luxury suite coordinator and more than $400,000 for a senior interior designer.

Once reporters started asking for additional public documents, the USDA stopped providing the records.

The way these taxpayer-funded programs are set up makes it otherwise difficult for the public to see exactly where the money is going — and who it’s connected to.

Farmed Out

Farming is an inherently risky business — and not just because of the physical labor and heavy machinery. Every year farmers battle weather, diseases, and pests, but they also face the uncertainty of the market for their crops or livestock.

“You make money one year. You lose money three years. Then you break even that other year,” said fourth generation Missouri farmer Darvin Bentlage.

That’s why the federal government offers subsidies to farmers to help mitigate some of the risks and protect them from economic factors beyond their control. The programs allow farms to apply for funding on behalf of anyone who is “actively engaged” in the farm’s operations — having more people involved means the farm gets more money, on top of a system that already favors larger farms because it’s based on acreage.

Many farms use partnerships to organize multiple people under one umbrella and streamline the process of applying for various forms of agriculture assistance.

The documents InvestigateTV obtained from the USDA detail the members of farm partnerships and how much they received from 2016 to 2018.

Those partnership members are supposed to be “actively engaged” in farming, but InvestigateTV found individuals whose addresses and occupations call that into question.

In addition to the luxury suite coordinator and designer, others included an attorney for a New York engineering firm, an energy executive in New York City, a brand creative director in Florida and a judge who lives hundreds of miles from the farm she’s connected to.

“Most people in the public who know about these programs believe that they are going to farmers, people who need the money, people who need help to keep their farm afloat,” said Anne Weir Schechinger, a senior analyst at Environmental Working Group (EWG). “But in a lot of cases . . . that’s not going to someone who’s farming and who needs the money to help keep their farm afloat.”

EWG, a nonprofit research and advocacy group that has studied subsidies since the 1990s, compiles subsidy information from the USDA into a database.

Schechinger said she was surprised InvestigateTV was able to obtain information about partnership members.

“It’s interesting that you were able to get it,” she said, “but also interesting that they changed this law to make it less transparent into who’s getting these subsidies.”

Schechinger said in 2008, the language in the farm bill was changed to shield the information of partnership members.

“This is taxpayer funding, we should know who the members of these partnerships are,” she said.

Who gets the subsidies, and how much they get, is a point of contention for everyone from politicians to the farmers themselves.

A Lifeline with a Disparity

Darvin Bentlage first sat on a tractor when he was 10 years old. He followed in the footsteps of his father, grandfather, and great-grandfather in raising cattle and growing crops in Golden City, Missouri.

Darvin Bentlage is a fourth-generation Missouri farmer.
Darvin Bentlage is a fourth-generation Missouri farmer.(InvestigateTV)

“It’s in your blood,” he said. “It’s not a job. It’s not an occupation. It’s who you are.”

Bentlage, now 65, is heavily involved with organizations such as the National Family Farm Coalition and said farm subsidies like the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs have been a lifeline over the last several years for farmers like himself.

“The last couple years that’s been 40% of the income. And so they help,” he said.

From 2014 to 2018, total ARC and PLC payments averaged $5.2 billion each year, with the USDA and the Congressional Research Service expecting that number to go up through 2023.

“It’s not a way I want to make my money, I’d rather make it on production,” Bentlage said.

But the price of farming compared to what his crops sell for has made that difficult.

“It’s been pretty challenging the last six years, I’d say we got prices that are below the cost of production,” he said.

Each subsidy program has a different formula for determining how much the farm receives in that person’s name. Funds are primarily based on the farm’s acreage and the market conditions for each crop, and there are caps on how much each individual can get.

Proponents, such as Arkansas attorney Robert Serio who has represented hundreds of farms during his career, say this system is fair.

“The subsidy program has always, in my opinion, been set up in a fair way, because it’s really based on acres,” Serio said. “So, if you’ve got one acre, you may be eligible for one acre’s worth of farm program payments, if you have 100 acres you eligible for 100.”

However, Schechinger, from EWG, said that set up perpetuates disparities and hurts smaller farms.

“The small farms are really the ones that don’t have assets to fall back on when they’re struggling,” she said. “Large farms have a lot of cash, a lot of land to fall back on when times are tough, and yet the payments mostly go to these largest farms.”

She added that large subsidies can also drive up the cost of land, pricing out smaller farms.

Darvin Bentlage says farm subsidies have been a lifeline over the last few years.
Darvin Bentlage says farm subsidies have been a lifeline over the last few years.(InvestigateTV)

Back on his 760 acres, Bentlage said he’s seen that firsthand.

“The small guys can’t compete,” he said, adding that in his experience it goes beyond land prices.

“Then they collect these subsidies, often, above and beyond the caps, because there’s a way to get around those caps too, and so they get most of the money,” he said. “And they’re the ones that least need it.”

Farms can avoid those program caps — caps of $125,000 per year for the Agriculture Risk Coverage and Price Loss Coverage programs, for example— through partnerships.

Partners

In order to take advantage of subsidy programs, partnership members must be “actively engaged” in the farm’s work, defined by the USDA as someone who contributes capital, land, equipment, active personal labor or active personal management.

The subsidy data provided by the USDA doesn’t say how partnership members are connected to a farm — and in some cases, listed members may not know themselves.

InvestigateTV sent letters to eight farms and partnerships, as well as 17 partnership members who brought in high dollar amounts of subsidies in 2016-2018 but whose addresses and occupations raised questions.

Only one farm responded — DeLine Farms, which is headquartered in Missouri and has received millions in subsidies over the last few years — and did so through its attorney. The farm’s attorney is Robert Serio, a fact learned by InvestigateTV after his initial interview. Serio said the farm did not want to comment, but further questions could be directed to him.

However, one individual associated with the farm responded independently to InvestigateTV, saying she was unaware her name was associated with more than $130,000 in subsidies.

The woman, who is a licensed insurance agent, told InvestigateTV that her husband had worked for DeLine Farms as a farm hand around 2016, but she was unfamiliar with the subsidy program.

When contacted about the situation, Serio said he wasn’t surprised, because spouses are eligible to apply for subsidies if the other spouse is “actively engaged,” which the husband was at the time, both as an employee and as a member of a corporation that invested in the farm.

He also said the woman likely wouldn’t have had to sign anything for the subsidy other than a statement of income— meaning she could be listed as a member of the partnership without having direct knowledge of what subsidies were involved.

Redacted USDA documents show an application for various farm subsidies. While the signatures...
Redacted USDA documents show an application for various farm subsidies. While the signatures are partially obscured, it appears one person signs for multiple partners.(USDA via InvestigateTV)

Documents from the USDA, while redacted, appear to show evidence indicating one person signing subsidy contracts for multiple partners on another farm, including for those listed as spouses.

Spousal relationships were a common occurrence in the records reviewed by InvestigateTV.

Brantley Farming Company in England, Arkansas, got $337,347 over three years on behalf of Kristen Brantley, a luxury suite coordinator for the Dallas Cowboys.

Kristen’s husband, Andrew Brantley, who co-founded an insurance facilitation firm in Dallas, is connected to the farm through the family as well as a corporation, and the farm received the same amount in his name.

These corporations, typically Limited Liability Companies, were a key connector of other individuals to farms.

For example, Seward & Son Planting Company received more than $400,000 over three years on behalf of Cameron “Egan” Seward, an interior designer who has worked in New York and London but is connected to the farm through family and by shares in different LLCs.

These type of shareholder connections, EWG’s Schechinger said, are where things become murky, because there is virtually no minimum for how much farm work has to be contributed to count.

“These people also have to put in some time to manage or work on the farm, but there’s no definition of how much time is enough,” she said. “So, you can just call on to a few shareholder calls every year or visit the farm once. And that along with owning a tiny share of a farm is enough to be qualified for these payments.”

Scrutiny

Serio, the Arkansas attorney, said he doesn’t see a problem with the current partnership structure.

“Partnerships can be eligible to receive farm program payments for those partners who are actively engaged in farming,” he said. “So it’s just not people out there. It is partners who are actively engaged in farming.”

Based on the examples of farm subsidy payments described to him by InvestigateTV, he said he thinks these partnerships are operating lawfully.

Attorney Robert Serio has represented hundreds of farms and other agriculture clients during...
Attorney Robert Serio has represented hundreds of farms and other agriculture clients during his career.(InvestigateTV)

“There’s a lot of talk about people who live in the cities getting payments and things like that. In the past, and I’m saying 20, 25 years ago, that was true that there were persons doing that,” he said, “but most of those persons were not in partnerships. Because partnerships have been scrutinized by the government.”

In the late 1980s, public outcry over the eligibility of those receiving farm subsidies led to the passage of the Farm Program Payments Integrity Act, which created the “actively engaged” standard.

“You’ve got to have some aspect of farming,” Serio said. “Marketing, or irrigation, or planting or harvesting, or, I guess, crop insurance, just regular insurance — something that you would do that you would manage for that farm operation.”

But Schechinger said the requirements of being within the parameters of the law still leave a lot of wiggle room.

“This ‘actively engaged’ idea is very vague,” she said. “That’s really how we see these people in cities getting payments. They never have to step foot on the farm.”

As policy advocates, Schechinger said the EWG isn’t against the basic idea of farm subsidies, but that the programs need to be retooled.

“Congressmen are well aware that this happens, and that there are things that can be done to change it, but they are not doing those things,” she said.

Sen. Chuck Grassley, who sits on the Committee on Agriculture, Nutrition, and Forestry, spoke with InvestigateTV about the issue in 2020. The Iowa Republican said he has been trying to make some of those changes by offering amendments to farm bills that would implement a hard cap of $250,000 per farm.

“If Iowans hear me say a limit of $250,000, then they’d probably say, ‘Boy, that sounds like a big subsidy,’ but you’re trying to find a compromise between those people that want the limit to be $2 million, versus those who want it to be $50,000.”

While his amendments have passed the Senate, he said they’ve been met with resistance in the House of Representatives, where they end up being gutted by members who represent Southern agriculture.

The 2018 Farm Bill passed out of the U.S. Senate on June 28, 2018. It received final passage by...
The 2018 Farm Bill passed out of the U.S. Senate on June 28, 2018. It received final passage by the U.S. House in December of that year.(U.S. Senate)

Grassley said he also has pushed for provisions that would limit farms to a single manager with on-site management.

“This is kind of a tongue-in-cheek answer,” he said, “but everybody getting this help ought to have dirt under their fingernails.”

Darvin Bentlage, the Missouri farmer, said he feels the same way.

“Their life isn’t farming,” he said. “They start having people become part of the partnership that has no idea what’s going on out there.”

He said the disparity in subsidies is driving small farms out of business.

“We got as many farmers going bankrupt, almost as bad as the farm crisis of the 80s,” he said, referencing a period when record crop price drops and a trade war with the Soviet Union led to large numbers of farm foreclosures.

Chapter 12 bankruptcies, which are for family farms and fisheries, have steadily increased over the last five years. In fiscal year 2020, 589 farms filed for bankruptcy protection, up from 459 in 2016.

“You can’t make it,” Bentlage said.

He added he’s already seeing it affect the next generation of farming.

“It’s hard on young people,” he said. “I’d like to see young people get involved, but how can they?”

Mary Claire Molloy and Adam Stockholm contributed to this report, and Esme Middaugh, Vivek Rao, Lucy West, Rachel Hammes, Kyra Miller, Michael Skiles, Sammi Bilitz, Taylor Killough and Brianna Lanham provided research assistance. All are from the Arnolt Center for Investigative Journalism at Indiana University, a partner of InvestigateTV.

Copyright 2021 Gray Media Group, Inc. All rights reserved.