Farming for Federal Dollars

Meet the Minnesotans who receive subsidies for not growing anything

But its jovial owner, Pat Mulroy, did what thousands of landowners in Minnesota do: enrolled in a Conservation Reserve Program (CRP).

On one hand, Mulroy is no more a farmer than he is a trapeze artist. On the other, he is doing exactly what the program requires, which is to say: not farming.

Implemented in 1985, CRP compensates farmers who take certain cropland out of production for 10 or 15 years, depending on the contract.

The USDA had two motives for doing so: It limits supply and increases the profit for farmers who continue to produce the crop, which effectively amounts to state-sponsored price manipulation.

The other, more publicly palatable intent was to preserve "environmentally sensitive" terrain and wildlife.

"Every morning I look out, I have pheasants walking around the yard, deer on the driveway," Mulroy says. "CRP was designed to protect open space, and boy I tell you, open space is hard to come by these days."

If you're willing to forego farming or grazing said open space, you can make a pretty penny. With two properties under his name—the other in the western part of the state—Mulroy's 120 acres of non-farmland raked in $36,779 in federal subsidies in the past three years.

"When you get down to it, you're renting your property to the USDA," he says. "The best part about CRP is that it protects wildlife. It really protects wildlife."

For that reason, the USDA prohibits the use of snowmobiles, four-wheelers, or any motorized vehicle on CRP grounds.

Recreational hunting, however, is allowed.

Robert Engstrom

Real estate developer

Subsidies received in 2009: $1,989

Asked about the CRP checks sent to his Minneapolis offices, Robert Engstrom frames the two grand as virtually insignificant.

"If you think this is a big windfall, you're barking up the wrong tree."

He's right, in a sense. The amount of subsidies the Minneapolis-based real estate developer rakes in—just shy of $6,000 over the past three years—is peanuts compared to the money he makes from developments and rental properties.

Engstrom presides over Robert Engstrom Companies, which specializes in environmentally friendly domiciles. His 113-home, 241-acre Field of St. Croix neighborhood near Lake Elmo was the first conservation development in the state and has garnered awards from homebuilders' trade groups and open space organizations alike.

But it's a 120-acre plot of land near Detroit Lakes that the USDA has chosen to reward with federal taxpayer money.

Nestled amid rolling hills, Engstrom's late parents' sprawling estate is home to literally thousands of evergreens and deciduous trees, which Engstrom says he planted himself. He gets paid $2,000 not to raze the estate and turn it into a farm, which he likely had no plans to do anyway.

"It's about enough to pay taxes," he says of the $1,989.

Neal Anderson

Real-estate salesman

Subsidies received in 2009: $10,658

Minneapolis resident Neal Anderson is a self-described "absentee landowner," but he doesn't consider the term pejorative.

"It's like sharecropping," he explains. "When you own land and rent it out. We've had farmland in our family since the 1930s, and that's the way it's always been."

Although he's never farmed himself, the real-estate salesman owns or co-owns five farms across the state. This has earned him at least $10,000 in subsidies in each of the past three years.

The bulk of the payouts come from a 320-acre farm in Lac qui Parle County, which sits against the South Dakota border. The farmland is enrolled in CREP, a more lucrative offshoot of CRP that pays landowners to convert grass or riparian forest.

It's a solid three-hour commute from the cities, but fortunately for Anderson, it requires minimal upkeep. Every three to five years, he'll do a controlled burn to rejuvenate the soil.

"It's a place to put your money where you'll get a set return in a set amount of time," he says. "It's a safe investment that does great things for the environment. From a wildlife standpoint, the CRP has been by far the best thing to happen to this country."

Ten grand a year would be decent money for most, but Anderson insists he barely breaks even.

"We pay our land payments right when the checks comes in," he says. "It goes right to the bank. It offsets the mortgage for the most part."

Brian Geis

Attorney

Subsidies received in 2009: $52,568

Prior Lake attorney Brian Geis makes more money per year in farm subsidies than the average Twin Cities resident makes in wages.

Geis and his mother, Dorothy, don't exactly fit the bill of the struggling small farmer. Their stately two-story home on Summit Avenue in St. Paul is more Great Gatsby than American Gothic.

Nevertheless, Brian collected $52,568 in CRP payments last year, with Dorothy accepting another $22,253. They had an even better 2008, wracking up a combined $95,382.

Brian didn't return messages seeking an interview, but his brother David—a corn and soybean farmer who owns land in Redwood and Pipestone Counties—says the bulk of Brian's payments stems from a 476-acre plot near Milroy. Brian bought the farm from David in the late '90s and immediately enrolled it in CRP.

Asked whether he thinks the amount could be construed as excessive, David was quick to defend the subsidies.

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