Valley Farms 'Double Dipping' Subsidies

Fresno Bee, Dennis Pollock and Robert Rodriguez

Published August 2, 2005

Many farms in California's Central Valley Water Project are "double dipping" in taxpayer pockets by using subsidized water to grow subsidized crops, a watchdog group charged Tuesday.

The Environmental Working Group released a study saying that in 2002 - the latest year for which subsidy figures are available - 6,800 farms in the Central Valley Water Project took in a combined total of $538 million in crop and water subsidies.

The group released its study and published online lists that detail what it termed as "double dippers" and "triple dippers."

The report immediately was disputed by some growers who question the accuracy of estimates on the figures for water subsidies and the identification of farm companies named.

The study showed that nearly 20% of Central Valley farms had "double dipped" in 2002, collecting water subsidies of $121 million and crop subsidies worth another $122 million for that year.

In addition, the study characterized some dairy operations as "triple dippers," receiving taxpayer-subsidized water to grow corn, for which they receive crop subsidies. The corn was then fed to cattle to produce milk, cheese and other products eligible for federal dairy subsidies.

"We're trying to re-start a conversation that has been going on in Congress for 15 years - the absurdity of using subsidized water to grow subsidized crops," said Bill Walker, West Coast vice president of the nonprofit group. "What was intended to be a support program for small family farmers has turned out to be a corporate welfare program for big agribusiness operations."

West Fresno County farmer John Harris, whose farming operation was listed as one of the largest subsidy recipients, disputed the report's findings, saying its water subsidy figures are inflated.

"They are assuming farmers are paying a much lower rate, and that is not true," Harris said. "I am paying the full cost for that water."

Farmers using Central Valley Project water do get a break by not paying the interest on the original $3.6 billion needed for the project's dams, reservoirs and canals.

Tupper Hull, spokesman for the Westlands Water District, also argued that the organization's analysis is off base.

"They compare what a residential homeowner pays to what a farmer pays, and if it is more, then they consider that a subsidy," Hull said. "And that is entirely false."

Hull said municipal water users pay more because of the higher cost in delivering water to residential users.

Hull also took issue with the environmental organization's portrayal of farmers identified in the report.

"They have perfected the myth that this is about corporate farming," Hull said. "Yes, farmers on the west side are large; nonetheless they are no less family farmers than anywhere in the U.S. They go out and work on these farms and they employ a lot of people."

Politics of subsidies

Rep. George Miller, D-Martinez, former chairman of both the House Resources Committee and House Water Subcommittee, issued a statement, however, lambasting the way federal farm subsidies are used.

"California's megafarms are the most politically powerful welfare recipients in the world," it read. "First they take public water for pennies on the dollar, then they get taxpayer payments for their surplus crops. And the government's been encouraging this for years and years."

But Rep. Jim Costa, D-Fresno, said Miller has long "used agriculture as a convenient whipping boy."

"I don't think Congressman Miller, nor the source for this information, deliver the most objective view on how American farmers can effectively compete in the 21st century global economy," Costa said.

Costa added, "There is room for reform in the use of subsidies, whether it is farm or other programs such as housing [and] transportation. Most farmers I know say they prefer there would be no subsidies."

Fresno area environmentalist Lloyd Carter said the issue is "not liberals versus conservatives. It is whether it is a good investment for taxpayers. I think it's a shocking waste of the public's money."

Carter believes federal farm policies are not saving family farms, but are geared to "big corporate farms."

Estimates matter of debate

The study was released as federal lawmakers prepare to debate the next farm bill that will determine future farm subsidies, and the U.S. Bureau of Reclamation drafts new water contracts for Central Valley irrigation districts.

"These contracts make it impossible for California to plan sanely and fairly for the water needs of the rest of the state," Walker, of the watchdog group, said.

He argued there has been a lack of "political will" to address the system that he terms "just absurd, one subsidy driving the other subsidy."

Walker said the report, called "Double Dippers: How Big Ag Taps into Taxpayers' Pockets - Twice," is the first in which an estimated water subsidy amount has been listed along with crop subsidies. It is available online at www.ewg.org .

When the Environmental Working Group issued a report on estimated water subsidies late last year, Westlands General Manager Thomas Birmingham called it "fiction."

Walker said the water subsidy estimates "are based on what the Bureau of Reclamation says would be the replacement cost if it built a new dam on the San Joaquin [River]."

The other figures - on crop subsidies - come from the U.S. Department of Agriculture.

Riverdale grower Mark Borba said the entity that was listed as Borba Brothers Farms by the Environmental Working Group is a 450-acre operation that is "outside the federal water service area and has never received federal water." It is listed as 14th among the top "double dippers."

Borba is a principal in other farming entities, he said, some of them in the Central Valley Project service area and some outside.

Borba said the United States "cannot unilaterally disarm" in the face of subsidies worldwide.

"Pakistan and India, for example, provide resources to growers - water, land, sometimes seeds - and when you come to the table to talk trade and subsidies, it's like Jell-O; you can't get your arms around what their subsidies are," he said.

"Our program is totally transparent; anyone can get it in great detail."

Borba said he believes those with the Environmental Working Group have an agenda.

"They believe large-scale commercial agriculture is almost sinful," he said. "They think 160 acres and a mule is where agriculture in the United States should be.

"They despise large-scale agriculture and refuse to recognize the economic realities of farming in California. It's a very capital intensive business." The Associated Press contributed to this report.