FARM SUBSIDIES: MARANA FARMERS RECEIVE MILLIONS

Art Pacheco, who lives on Golf View Drive in an upscale Oro Valley neighborhood, would not strike most people as being a struggling Marana farmer who needs hundreds of thousands of dollars of your tax money to grow cotton for a living.

Nor would it seem that Marana Vice Mayor Herb Kai, a successful and wealthy businessman, would fit the picture of the hard scrabble farmer that the federal crop subsidy program, created during the depths of the Great Depression, was originally intended to benefit.

But Pacheco and Kai are just two of 55 Pima County farmers or farmland owners who raked in more than $10.6 million in taxpayer-funded crop subsidies between 1996 and 2000, according to recently compiled federal records.

The once secret information of how much money individuals and corporate agribusinesses received from taxpayers under the federal subsidy program was forced open by a 1996 lawsuit brought by the Washington Post.

The information was compiled and released in November by the Environmental Working Group, a Washington D.C. based, non-profit organization that's pushing for farm finance reform and increased conservation measures in farm legislation.

Statewide, taxpayers provided $780 million to 25,390 federal farm subsidy recipients. Almost 52 percent of those payments, or $404 million, went to just 2 percent of Arizona farmers, who averaged $108,000 a year in federal payments.

By comparison, the average Arizona farmer received only $9,770 per year, or about 22 times less than those farmers in the top 2 percent, according to the Environmental Working Group's report.

The vast majority of the subsidy recipients in Pima County had farms in Marana and some received some of the largest payments from the program.

Many of the Marana farmers received crop price supports, disaster relief and other federal subsidies that far exceeded the national average, with 21 farmers or farm property owners receiving more than $100,000 over the four year period.

Pacheco Farm Management and Consulting pulled down $376,288 in four years, in addition to $201,639 funneled to Evco Farms, which Pacheco also has a business interest in, according to the federal records.

"People are going to look at it that the farmers are the only beneficiaries in all this," Pacheco said. "But the whole country, the whole American way of life is subsidized. The American consumer pays the lowest percentage of their income for food of any country in the world and the reason that works is because of these price supports. You're subsidized at the grocery store."

Kai Farm Partners, which Arizona Corporation Commission records show is owned by Herb Kai and his brother John Kai, Jr., received $783,863 between 1996 and 2000.

Neither of the Kai brothers returned calls seeking comment by press time.

Nationally, the revelation that professional basketball superstar Scottie Pippen received $137,575 in farm subsidies and corporations such as EXXON have raked in millions from the program, has has led to a cry for reform.

The release of the financial information, coinciding with the partisan legislative battle currently being slugged out on Capitol Hill over federal funding for the farm subsidy program, has served as more than just an "outing" of large agricultural interests and wealthy individuals on the public dole.

With the nation's economy in recession and the budget surplus evaporating, Republicans, including President George W. Bush, have called for reforms and reductions in the farm subsidy program.

On the other side of the political aisle, Democrats, led by congressional committee members from key farm states, have pushed for legislation to bolster the program, citing the crumbling economy as reason why farmers need support more than ever.

Last week, the Senate imposed an annual total limit of $275,000 per farm and would cut off aid to anyone earning more than $2.5 million per year as part of an amendment to the 2002 Farm Bill. Currently, farmers can receive unlimited subsidies under certain programs and an $80,000 cap on fixed annual payments.

An amendment that recently passed in the House of Representatives would place the total cap at $550,000 per farm each year.

The Senate's version would cut farm spending by $130 billion over 10 years, and redirect the money to food stamps, agricultural research and other programs.

In Marana, where politicians and town planners have repeatedly reaffirmed their commitment to preserving an agricultural way of life under threat from rapid development, falling cotton prices and overseas competition, the release of the information has revealed farming in the town to be essentially on federal life support.

"I don't know of anyone in the town that's not receiving federal support. If you pull or significantly reduce the subsidies, farming in Marana will vanish," said Dan K. Post, a Marana farmer who also serves as vice-president of the Marana Unified School District's governing board and received $186,329 in federal subsidies over the four year period.

"Without the subsidies, cotton would be a losing proposition in Marana," said Marana's Development Services Director Jim DeGrood. "But as it stands, it remains an important part of the town and the local economy."

There's little doubt that cotton, even with federal cash infusions, is struggling in Arizona and across the nation, said Russell Tronstad, an associate professor and extension economist with the University of Arizona's agriculture department.

After reaching a record high of 690,000 acres in 1953, total cotton acreage in Arizona has plummeted from 591,000 acres in 1980 to 278,000 acres in in 1999 - a 53 percent decline in less than two decades, Tronstad said.

The University of Arizona's College of Agriculture and Life Science received $38,976 in federal subsidies between 1996 and 2000.

"That's not unusual, we grow and market crops just like everyone else," said Eugene Sander, dean of the UA's agricultural college.

Prices for cotton have fallen precipitously over the years. The price of cotton last week dipped below 40 cents a pound, or less than farmers were receiving during the Depression, according to statistics from the National Cotton Council.

Arnold Burruel, who farms cotton and other crops in Marana and Pinal County, received more than $1.3 million in government funding and was the largest beneficiary of federal subsidies in Pima County. Like most of the farmers and farm property owners interviewed for this story, he vehemently defended the taxpayer's support of his cotton farming operation, focusing much of his anger on overseas competition that has eroded American markets.

"If we want to level the playing field, then I would be able to hire a South Korean worker who would be willing to live in a refrigerator box. He would also go to the

politicians and lobby them to vote

the way that I want them to vote, and he would do all of this for the equivalent of $50 per month," Burruel said. "Let me shop my cotton on a Third World basis.

"The American people are going to look at these subsidies and think we're all getting rich off their tax dollars. What they don't see is that most of us are just getting by. They won't see that foreign governments are subsidizing their farmers who don't have to work under the same restrictions that the American farmer does. They don't have minimum wage laws and other restrictions," Burruel said.

Post also believes the subsidies remain necessary to keep American farmers competitive, but admits there are abuses.

"It helps the small farmer, but there are large farmers around who abuse the system. You can find plenty of people who file under their own names, their wife's name and their brother's name," Post said.

The subsidies are only intended to weather the periods when crop yields are bad and prices are low, Post said, adding that he's only received the subsidies for the last five years of the three decades he's farmed in Marana.

Burruel takes a more pessimistic view.

"We've got ourselves in a trap. Over the years, we've become completely dependent on subsidies, and there's no way to do away with them without killing the American farmer. It's not like we can just move on to other employment," Burruel said. "What do I do with 5,000 acres of farm ground? What do I do with $2 million of rolling stock designed to harvest cotton?"