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Feeding At the Trough

By Hannah Wallace December 31, 2008

There is one thing I don’t get about U.S. agriculture.

At a time of record food prices and excellent ratings for the U.S. Farm Credit System, growers, farmers and ranchers are benefiting from higher-than-ever subsidies. The 2008 Farm Bill not only provided record funds for direct subsidies, but for the first time included fruit and vegetable producers as recipients of federal subsidies, a move which will particularly benefit Florida growers.

This deserves a little taxpayer scrutiny, especially at a time of trillion-dollar bailouts with our money.

It’s not clear yet exactly how area growers will benefit from new block grants Congress awarded this summer for fruit and vegetable crops. However, a nifty database assembled by the Environmental Working Group allows a glimpse of federal subsidies for local agriculture in the recent past.

Florida agriculture has been a moderate gobbler at the subsidy trough. Although it’s an agriculture powerhouse, it ranked only 28th of 50 states from 1995 to 2006 as a recipient of subsidies. Florida received $1.26 billion of the Feds’ $177 billion, according to U.S.D.A. data posted on the Web by the Environmental Working Group.

Southwest Florida agribusinesses ranked fairly low on the list of USDA subsidy recipients. From 1995 to 2006, 342 agribusinesses received $11.11 million in federal support for operations in Manatee and Sarasota counties. Given that agriculture in the bicounty area generated hundreds of millions of dollars in revenues during that decade, $11 million seems minuscule.

Even so, federal subsidies are a way of life here. TakeMyakkaCity (pop. 4,239). In this horse, cattle and citrus village, which straddles eastern Manatee and Sarasota counties, 96 agribusinesses received a total of $3 million in USDA subsidies between 1995 and 2006. That would be $707 per resident.

And Florida is pushing its way to the subsidy trough. The new USDA budget includes $466 million for specialty crop block grants over five years. Florida is entitled to 11 percent of that pot of money, the second largest share behind California.

Don’t get me wrong; I am not a market Taliban pouring my wrath over government programs in general. I believe that for reasons of national food security, natural disasters and to keep land ownership and food production in as many hands as possible, state subsidies could play a constructive role in agriculture.

But these new subsidies for specialty crops in Florida are coming at a seemingly good time for growers and a tight time for the federal budget. I question the necessity of subsidizing dairy farming. Dairy farmers were the biggest recipients of direct-subsidy USDA checks in the bicounty area during 1995-2006. The U.S. Office of Management and Budget rated it as “not performing.” The government internal watchdog group had the following comments about the program, which makes up 11 percent of all federal ag subsidies: “Results not demonstrated,” “major design flaws,” and it points out that the U.S. Department of Agriculture, which buys, stores and sells or donates massive amounts of dry milk, butter and cheese, is not required to cut costs. Heck, even the milk lobby wants the program “streamlined.” 

I question giving subsidies to companies or farmers for “not farming” their land. SMR, the developer of Lakewood Ranch, received $15,000 in conservation subsidies between 1998 and 2004, even though it turned much of its land into suburbia.

I also question subsidies to Southwest Florida businesses that grow crops elsewhere. Palmetto-based packinghouse Taylor & Fulton Inc., which employs around 1,000 workers at the height of the tomato season, pocketed $219,000 in subsidies for soybeans, wheat, corn, barley, cotton and oat grown in its Virginia operations between 2000 and 2006.

Meanwhile, Mexican farmers and growers are getting the worst of both worlds. On one hand, the Mexican state, compelled by NAFTA, drastically cut agricultural subsidies and protections. At the same time, its U.S. competitors are getting more welfare.

My bet is that the rest of the world is not going to swallow our 2008 Farm Bill without choking.

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The number of Russians living and investing in Southwest Florida has risen quietly but steadily over the past decade. More than 10,000 Russian-speaking Russians and Ukrainians now live in Sarasota and Manatee counties.

Nikolay Safonov, a Moscow-born computer engineer who moved to Sarasota in 1999, is trying to translate that into business. He says his Russian American Association has 40 business members in the area. Safonov, who works as a financial planner, recently organized an event with the Russian foreign ministry and U.S. Department of Commerce officials explaining the opportunities Europe’s most populous country offers. Expect more networking and social gatherings to come.

Says Safonov: “There’s very little awareness here. There are very important [Russian] investors, but you have to reach them. Make them discover Florida beyond Miami!”

See russianamericanassociation.org.

 

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Finally, we have a direct connection to mighty neighbor Mexico again, even though it might only be for the winter season, and only to a resort. On Dec. 18, JetBlue began daily nonstop service from TampaInternationalAirport to Cancún. Fares start at $198.

Johannes Werner is a Sarasota-based business journalist who has worked in Europe, Mexico, the Caribbean and the United States. He is the editor of Cuba Trade & Investment News and hosts the Florida-Caribe radio show on WSLR 96.5 FM.

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