Farming for Federal Dollars

Meet the Minnesotans who receive subsidies for not growing anything

There are no corn, soybean, or wheat fields within biking distance of Royalton Heating and Cooling. The shop's headquarters, located in the decidedly un-rustic suburb of Brooklyn Center, isn't even within a stone's throw of a garden.

Yet the USDA sent checks totaling $6,522—made out to Stewart Brothers Partnership—to this address in 2008 for corn, soybean, and wheat, with an additional $2,600 coming in last year.

That's about all we know, because when we got Brady Stewart, Royalton's registered owner, on the phone, he had no interest in discussing the taxpayer subsidies he receives.

Asked whether he was involved in farming, Stewart sounded almost incredulous.

"We're not interested in anything like that," he said. "This is just a heating company."

Click.

No other facet of Midwestern policy elicits more controversy than farm subsidies. Implemented during the Dust Bowl as a safety net for struggling farmers—who then comprised 25 percent of the nation's population—the federal handouts have long since mutated into something else entirely. The vast majority of the public largesse is doled out not to family farms, but Big Agribusiness. About 10 percent of recipients account for 75 percent of the $10 to $30 billion the U.S. Department of Agriculture shells out each year.

Efforts to rein in farm subsidies have been stymied for years. Chalk it up to Big Ag's lobbying efforts, the disproportionate political clout enjoyed by rural states, and the romanticized notion of life on the farm, but few meaningful reforms have gotten out of the starting gate.

At $1 billion, Minnesota is the fourth biggest recipient of federal farm subsidies. In order to shed some light on who is receiving this money, City Pages filed a Freedom of Information Act request with the USDA. The resulting database contains tens of thousands of the farm subsidy recipients in each of the last three years—hundreds of whom reside in the metro and rarely, if ever, set foot on a farm.

"When absentee owners reap commodity program benefits, we consider that to be an abuse of farm programs," says Adam Warthesen, policy organizer with the Land Stewardship Project, a Minnesota-based non-profit. "There have been ample opportunities in Congress to cinch up some of these loopholes. They have utterly failed. And that gives all the other programs a bad name."

Noel Rahn

Venture capitalist/CEO, Rahn Group

SUBSIDIES RECEIVED IN 2009: $25,848 (MINNESOTA ONLY)

One would be hard pressed to invent a starker antithesis of the small family farmer than Noel Rahn.

Prior to forming California venture capital firm the Rahn Group in 1998, Rahn presided over Investment Advisers, Inc., a money-management firm headquartered in Minneapolis. During his 25 years at Investment Advisers, he helped grow the company from $50 million to $16 billion.

Along the way, the University of Southern California alum got heavily involved with agriculture, buying up thousands of acres of cropland and renting it out to farmers.

The land also provides a nice windfall from the federal government. Between 1995 and 2006, Rahn reaped $1,171,595 in corn and soybean subsidies, according to data collected by the Environmental Working Group, a watchdog organization that keeps a database on national farm subsidies. Last year, he collected $25,848 from his Minnesota land alone.

Rahn didn't return messages seeking comment. Perhaps he was out plowing?

David Alme

CEO, ABC Wire Sales

Subsidies received in 2009: $15,732

By his own admission, David Alme isn't your typical farmer. He's first and foremost a businessman—and a financially successful one at that.

Alme, 65, is co-founder of ABC Wire Sales, a company that manufacturers the steel string that recycling centers use to wrap bundles of salvaged waste. The affable resident of tony East Isles projects that ABC's profits this year will approach $6 million. He puts his yearly salary between $700,000 and $800,000, depending on annual sales.

Hardly the kind of person who requires government handouts to make ends meet. No matter. Alme collects more than $15,000 a year in farm subsidies.

"The checks used to total $40,000," he says matter-of-factly. "They've shrunk in recent years, but I think it's nice that they're shrinking. I don't need subsidies."

The bulk of Alme's subsidies—$14,910 of last year's total $15,732—come from direct payments, a particularly controversial sub-category of farm subsidies, since they're tied not to production but base acreage.

"Direct payments are the most egregious form of subsidy," says Don Carr, press secretary for the Environmental Working Group. "These are checks that are mailed out no matter what. You might not even grow anything a particular year and still get a check."

Alme says he grows corn and soybeans every year, planting and harvesting the crops himself. He homesteads on his 900-acre farm in Goondue County—about an hour and a half west of the metro—a move that grants him an additional tax break.

"I shouldn't get paid for putting in trees that I would have put in anyway," he says. "It's unnecessary. I feel sorry for anyone who has to represent us in Washington."

Pat Mulroy

Body shop owner

Subsidies received in 2009: $14,175

If Mulroy's Body Shop on Nicollet Avenue in downtown Minneapolis seems like an unlikely destination for tens of thousands of farm subsidy dollars, that's because it is.

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