Forwarded by Jane Clark

EQIP

>Reauthorize the Environmental Quality Incentives Program (EQIP) through
2011 at $1.2 billion annual program level, with livestock producers
receiving 50% of annual funding. In addition, a $300 million fund is created
in EQIP to address ground water conservation issues, including cost share
for more efficient irrigation systems. Total: $10.3 billion over 10 years.

>While this legislation would provide a $1.5 billion annual increase for
agriculture conservation programs, two-thirds is dedicated to the
Environmental Quality Incentives Program (EQIP), and throws open the doors
on this program to subsidies of large, argibusiness-scale livestock
operations

For Big Hog Farms, Big Subsidies
Taxpayers May Foot the Bill for Environmental Cleanup

By John Lancaster
Washington Post Staff Writer
Friday, August 17, 2001; Page A01
FLAT BRANCH, N.C. -- Here amid the rolling green hills of North
Carolina's central plateau, on the edge of hog farm country, there's a
strong whiff of prosperity in the air.
Embraced by politicians and business leaders as an alternative to
tobacco and all its uncertainties, large factory-style hog farms -- some
housing 10,000 or more animals -- have brought jobs and wealth to
depressed rural communities and generated fat profits for the handful of
big companies that dominate the industry.
But prosperity has an unpleasant byproduct. Besides the stench that
sometimes wafts into neighboring subdivisions, the untreated waste that
hog farmers store in open lagoons and spray onto their fields has
sparked broad concern about potential threats to streams and drinking
water.
Now, with the Environmental Protection Agency contemplating new and
potentially costly regulations governing livestock waste, lobbyists for
the pork, cattle and poultry industries have proposed that taxpayers
help foot the bill. And Congress, it seems, is poised to go along with
the idea as it considers legislation that will chart a course for farm
policy over 10 years.
Already, the notion of using taxpayer dollars to help livestock
producers pay for environmental damage caused by their operations is
being labeled corporate welfare for the rich, and it echoes a larger
debate over farm subsidies.
Rooted in the New Deal, such crop payments are intended to protect
farmers from market fluctuations and ensure an affordable and steady
supply of food. But many lawmakers -- especially those from more urban
states -- have grown skeptical of the programs, which increasingly
benefit the wealthiest growers as the number of small family farms
continues to decline.

'Feeding the Country'
To L.D. Black, the support seems only fair. A burly, third-generation
farmer who wears Reeboks and a look of perpetual amusement, Black, 40,
switched from tobacco to hogs in 1993 and raises nearly 6,000 of them
under contract with Prestage Farms Inc., one of the state's largest
producers of pork and poultry. "In my view, we're feeding the country,"
he said. "If they want to eat cheap, someone's got to pay the costs."
The measure that Black and other North Carolina hog producers see as
their salvation was approved last month by the House Agriculture
Committee. It would lift the cap on the size of livestock operations
eligible for a U.S. Department of Agriculture program that helps both
crop and livestock producers pay for environmental projects.
Administered by the department's conservation service, the Environmental
Quality Incentives Program, or EQIP, until now has restricted its
livestock assistance to smaller producers -- in the case of hog farms,
those with 2,500 or fewer animals.
If approved by the Senate and signed into law, the legislation will mean
that any livestock producer -- including the largest and most profitable
ones -- will be eligible for up to $50,000 in assistance per year, or a
total of $200,000 over 10 years.
Supporters of the change say it merely recognizes the obvious -- namely,
that the scale of livestock operations has grown rapidly in recent years
and that helping the industry improve its waste management practices is
an undeniable public good. The measure -- initiated by Rep. Frank Lucas
(R-Okla.), who chairs the agriculture panel's conservation subcommittee
-- would increase the overall size of the EQIP program from $200 million
to $1.2 billion per year.

Corporate Welfare Charges
Environmental groups and advocates for small-farm owners call the
measure a clear case of corporate welfare and one that highlights the
enduring clout of agribusiness on Capitol Hill. They say that because
the EQIP program gives priority to livestock operators facing the
biggest environmental challenges, lifting the size cap will divert
resources from small operations to large ones, hastening the demise of
the family farm.
"The bigger guys . . . can afford to do it themselves," said Susanne
Fleek, director of government affairs for the Environmental Working
Group, a Washington-based research and advocacy organization. "I'm not
saying that you won't still get a public benefit. The question is, will
you get a public benefit you would have gotten anyway? . . . I don't
think we're paying DuPont to meet the Clean Water Act."
Timothy D. Searchinger, an attorney with Environmental Defense in
Washington, said the environmental measure in the bill underscores what
critics say is the larger problem with the crop subsidy program. "The
amount of money being shoveled out is incredible, and the fact is that
it's having no effect on keeping average farmers in business," he said.
A study published in June by the General Accounting Office, the
investigative arm of Congress, supports his point: In 1999, farms of
1,000 or more acres received 52 percent of farm payments even though
they make up just 8 percent of the nation's farms.
Lawmakers have grappled with these matters before. In 1996, the last
time the farm bill was up for consideration, Congress passed the Freedom
to Farm Act, which was supposed to phase out many farm subsidies by
2002. Since then, however, subsidies have increased to record levels --
$20 billion last year -- as Congress has doled out "emergency" payments
aimed at helping farmers through rough economic times.
This year, the House and Senate have already approved a $5.5 billion
emergency aid package that administration officials say President Bush
is prepared to sign.

'We Eat Cheaper'
Lucas, the subcommittee chairman, said critics of crop payment programs
often overlook the benefits they provide to consumers, to say nothing of
faltering rural economies. "Farm bills have been very successful since
1933," he said. "We eat cheaper than anyone else in the world."
Searchinger and other environmental lobbyists contend that farm
subsidies should be reapportioned in favor of conservation programs,
such as paying farmers to protect wetlands. Such payments, they say,
would not only benefit the environment -- more than half the land in the
contiguous 48 states is devoted to agriculture of one sort or another --
but also would channel support to smaller farms, specialty crop growers
and states that do not benefit from crop payments.
As passed by the House Agriculture Committee last month, the $168
billion farm bill would perpetuate traditional crop payments while
reserving about $15 billion for conservation measures, an increase over
current levels but far less than environmentalists are seeking. They are
backing legislation, co-sponsored by Reps. Ron Kind (D-Wis.) and Wayne
T. Gilchrist (R-Md.), that would increase conservation spending over 10
years to $35 billion.

Waste Issues Grow
Livestock waste is a particular concern. This is due in large part to
the trend toward large "confined animal feeding operations," or CAFOs,
in which animals spend their lives in metal sheds. An abundance of such
operations, the Agriculture Department's Economic Research Service
reported in June, "can overwhelm the ability of a watershed to
assimilate the nutrients contained in [livestock] waste and maintain
water quality."
But if lawmakers generally agree on the problem, the solution -- making
financial assistance available to large as well as small operations --
is not entirely settled. "I'm concerned about creating a program that
would unfairly subsidize large livestock operations," Senate Agriculture
Chairman Tom Harkin (D-Iowa) said at a hearing last month.
He added: "We've seen how farm programs have inadvertently [helped big
farms] get bigger . . . On the other hand, we want the larger operations
to be environmentally sound, so I'm on the horns of a dilemma, no pun
intended."
Nowhere, perhaps, is that dilemma illustrated more starkly than in North
Carolina, the nation's second-largest hog producer after Iowa.
The state is home to about 10 million hogs, each of which produces two
to four times the waste of an average human. More than 96 percent are
housed in confinement operations of 2,000 animals or more, according to
the North Carolina Department of Agriculture. The waste is typically
stored in open-air pits, called lagoons, then sprayed onto fields, where
its nutrient load of nitrogen and phosphorus is supposed to be absorbed
by plants.
State officials initially welcomed the hog industry, accepting its
assurances that hog waste posed little hazard to the environment.
Attitudes changed, however, after several large-scale fish kills linked
to spilled waste and warnings from scientists about potential -- if
still largely theoretical -- threats to underground water supplies. The
state slapped a moratorium on new hog operations in 1997.
Since the mid-1990s, North Carolina regulators have begun to toughen
their oversight, requiring, for example, that farmers with more than 250
hogs develop formal waste-management plans and apply for special
permits.

Bracing for New Rules
The EPA, meanwhile, has been developing new rules that essentially would
relegate agricultural runoff to the same category as pollution from
concentrated sources such as factories and sewage plants. Although Bush
has delayed implementation of the rules, which were initiated by
President Bill Clinton, livestock producers are bracing for new mandates
that they say would cost them $1.2 billion yearly over 10 years.
Like many people in his business, Black, the hog farmer, thinks he
already does plenty to protect the environment.
His immaculately kept 130-acre farm, about 60 miles south of Raleigh, is
something of a showplace, having recently been cited by the EPA for
exemplary waste-management practices. Black and his wife, Debra, flush
out their hog buildings with recycled water, store the waste in
clay-lined lagoons and spray it onto their fields at rates established
by state regulators, who periodically stop by to check his records.
Black fears, however, that he may face a new and onerous set of
restrictions, including a requirement that he greatly expand the area
over which he sprays the waste from his barns. The aim would be to
dilute the amount of phosphorus that enters the environment.
But because his acreage is limited, Black said, he would have no choice
but to pump the waste into a "honey wagon" and truck it elsewhere at
prohibitively high cost.
"They say it's going to take about four times the land," said Black, who
under current rules would not be eligible for EQIP assistance because he
keeps too many hogs. "I'd have to fold up and go home."
In many respects, Black is precisely the type of family farmer whom
lawmakers are forever saying they want to help. He grew up on his farm,
where his grandfather and father are buried beneath a stand of loblolly
pines. Black hopes that his 19-year-old son, who installs security
systems, will someday join him in the family business.
For now, Black is comfortable but not rich: Last year, he said, his hog
operation earned him a profit of about $50,000 (he also raises
chickens).
What makes the situation more complicated, however, is that Black does
not own the pigs he keeps in his barns. They belong to Prestage Farms, a
privately held North Carolina company with 1,000 employees that pays him
a fee to tend the animals while covering the cost of feed and veterinary
services.
In keeping with the trend toward consolidation in agriculture, that
arrangement -- called contract farming -- is typical of the hog business
in North Carolina. About 90 percent of North Carolina hog farmers are
contract farmers, and of those, well over half raise pigs for just one
company, Smithfield Foods of Smithfield, Va.
Smithfield is no family farm. Ranked No. 341 on the Fortune 500 list,
the publicly traded company is the world's largest pork producer and
last year earned a $75 million profit on sales of more than $5 billion,
according to its annual report.
In light of the pork industry's profitability, environmentalists wonder
why taxpayers should help bear the cost of managing its waste.
"We are working down here to try to get big companies like Smithfield,
which has basically taken over the industry, to pay their fair share,"
said Dan Whittle, a senior attorney with North Carolina Environmental
Defense. "The public can pay some role in the funding, but that money
should be targeted to those farmers who can least afford the changes."
Spokesmen for Smithfield and Prestage declined to comment on the EQIP
legislation. But Lucas, its principal sponsor in Congress, said the idea
of government extending a helping hand to industry is not unique to
agriculture. "There are no pure segments in the American -economy," he
said. "Whether it's the things we do to subsidize airports or highways,
we are subsidizing industries all across the board."

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