Ending Corporate America’s ‘Big Handout’

A new exposé shows exactly how toxic our food subsidy system has become—and how we can change it.
Soybeans are harvested with a Case 7010 combine harvester on a farm in Princeton, Illinois. (Photo: Getty Images)
Oct 18, 2011
Exec. Prod. of Franchises & Series. He previously reported for HuffPost, L.A. Daily Journal, and Biloxi Sun-Herald.

Two hundred billion dollars per year. That’s how much of taxpayers’ money Uncle Sam spends every year to subsidize commodity crops like wheat, corn, cotton and soy. That breaks down to about $1,500 per household, a not-so-small chunk of change, especially given our current financial crisis. 

Nevertheless, the mere mention of the term  “food susbidies” is enough to make most Americans’ eyes glaze over. The system that hands out our money to some of the biggest corporations on the planet is so opaque and complicated that it seems easier to throw up our hands in frustration than try to figure out what's going on. 

But that’s exactly what Thomas Kostigen has done in his accessible and illuminating new book, The Big Handout: How Government Subsidies and Corporate Welfare Corrupt the World We Live In and Wreak Havoc on Our Food Bills. Kostigen has produced a vertiable road map to the food subsidy system, walking readers through grocery stores, farms, and the halls of power, pulling the curtain back on the massive corporate welfare system and offering concrete steps for ending the handout. 

Kostigen spoke with TakePart about how we wound up in this mess, how we can get out of it, and why anyone who cares about the current Occupy Wall Street movement should pay attention.

 Photo: Rodale. 

You write that subsidies cost most households $1,500. Where is that money headed?

That is kind of the big question on the table. It’s going to big corporations and large corporate farmers who don’t need the money, to be perfectly honest, because they’re some of the most profitable companies in the world. We are subsidizing many industries in the form of direct payments, and people often don’t know it. It’s kind of the Big Fake that goes on. We’re told that we need to support certain social services, but within those social services are boondoggle programs that go to large corporations and actually go against what is in our best interest as Americans.

When food subsidies were introduced, I'm assuming they were thought of as a beneficial program. When did they go off the rails? 

Subsidies were largely introduced during the Great Depression when farm employment was far greater than it is today, and you had a nation that was built on its agriculture. To compete in the world marketplace and to give us a leg up, what we looked to do back then was support the farmers. Then, slowly, as different industries took hold and as corporations started getting into the farming business in the 1940s, with some vertical integration and some of the really Big Government years of the 1960s, corporations really started to see that farming is a business, and that they needed to produce far more food on bigger tracts of land, so they said, “Let’s create factory farms and get money from the government.” When that started to corrupt the system, you had a whole new generation of genetic engineering that went into things, and the use of our food as a political weapon around the world. You can start to see how subsidies seeped their way into so many parts of our lives that often we’re ignorant of. You can certainly see how subsidies do much more harm than good. I think people are waking up to that fact. The President most recently said that he wants to do away with $5 billion in direct payments to the agricultural industry. We have a new farm bill in 2012 coming out and there are all sorts of questions about that. And you don’t have to look much further than the Occupy Wall Street movement to see that people are upset with exactly this kind of corporate welfare.

Why is it that the largest corporations like Cargill, ADM and Monsanto are the ones receiving the largest subsidies? Why aren’t small, local, sustainable, family-run organic farms the ones getting these subsidies?

That’s a great question. There’s a really fantastic pyramid of food subsidies from the Physicians Committee for Responsible Medicine that shows the inverse relationship to subsidies and healthy foods. And that right there is the dilemma. Small farmers don’t have the opportunity to chip away at that pyramid because they don’t have the money to hire lobbyists in Washington who can then promulgate the whole subsidy system and direct it their way. 

What can the average reader who is fed up with the current subsidy system actually do as the Farm Bill is being written and marked up? What can they do today? How can they take action to say enough is enough?

I think the first thing to do—and I have a whole chapter devoted to what you can do in the book— is that we often don’t think it matters, but when politicians receive phone calls or letters from constituents, they do pay attention. [Sen.] Debbie Stabenow (D-Mich), who’s the head of the Senate Agriculture Committee, and [Rep.] Frank Lucas (R-Okla) on the House Side —getting in touch with those Congressmen makes a big difference in voicing your displeasure with them. To find out more about what individual subsidies are going on, even locally—you know they could be in your backyard—you can go to ewg.org and find out specifically what organizations are receiving subsidies. Then you can talk to your local politicians as well and start to raise the specter of these initiatives being eliminated. 

Short of that, Corporate Social Responsibility is another method. You can divest. You can divest of ADM, and divest of some of the other publically traded agricultural companies that receive a large benefit from subsidies and make your voice known that way.

 Photo: Rodale

In writing this book, how hard was it to “follow the money” and find out where our taxpayer money is going?

There’s a whole system and language behind this that’s used to obfuscate what’s really going on. And it’s that reality that’s tough to pin down. Often you’ll get the farm industry saying, “Well, we need some type of disaster insurance, so why don’t we subsidize it.” And you sit back and you go, that makes sense. But where do those payments go? How much benefit are farmers actually getting from those subsidized payments—it’s actually $2 for every $1 that goes in. What is really going on is very difficult to pin down. And who is really benefitting when you start to look at some of these Christmas Trees as they call them. You know someone is benefitting, and they pass the buck along to others, who also receive subsidies. So, it’s really difficult to figure out who’s getting the benefit from what. Because sometimes the smaller chicken farmers who are trying to make a living get gobbled up by the bigger groups. What happens then? And let’s look at the meat industry, which says, “We don’t get any direct subsidies from the government.” But when 85 percent of the production of a particular type of meat, whether pork or beef or chicken, is the grain and that grain is subsidized by the government. What happens there? So there are a lot of different interests that have a stake in seeing the subsidy system remain how it is, and there are a lot of different interests that throw a shroud over the entire industry and say, “OK, you just try and find me.”

What would an America without subsidies look like? How would the landscape be changed?

In the long run, eliminating subsidies would be a healthy thing, as we’ve seen in Australia and New Zealand. We’d see healthier foods on our tables because we wouldn’t be supporting the factory farm industry. We’d see less disease spread throughout our livestock and vegetables, because when you put more products—and let’s call our foods products—when you put more products together and grow them, it’s a lot more likely that disease spreads exponentially. I think we’d have a lot more income—obviously that money that we wouldn’t be spending on subsidies, and that could play itself out in a very positive way.

When someone finishes The Big Handout, what do you hope they walk away with?

I hope they get pissed off. And I say that as a good thing. Because getting pissed off and then doing something about it is a good thing. If you do something about it in a constructive way, that’s a very very good thing. Hopefully this will shed some light on the issue and inspire people to rise up, just as people are doing all over the world today saying, “This ain’t right.” And I don’t care if I’m a raging liberal or if I’m right wing Republican, this ain’t right, and let’s do something about it. And I think we’re at that point now. And hopefully people will start to put that energy into a direction that is more transparent, so we know what we’re getting in all of our foods, we know what we’re putting our tax dollars toward. And hopefully that will come back in many positive ways for us. Really it’s to invite a bit of activism and do something about it, instead of saying, “Oh, well.” That hasn’t really gotten us very far.

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