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Farm Aid Program of '88: 'Drought' Payments Even in Wet Areas : Study: America's 1988 drought captured attention everywhere, but especially in Washington where politicians pushed through the largest disaster-relief measure in U.S. history. The Associated Press tracked where the $3.9 billion went.

December 31, 1989|SCOTT McCARTNEY and FRED BAYLES | ASSOCIATED PRESS

The $3.9-billion drought-relief program of 1988, hailed as the salvation of small farms devastated by a prolonged dry spell, became much more than that. It was an election-year windfall for thousands of farmers who collected millions of dollars in compensation for normal quirks of nature.

An Associated Press study conducted over seven months found that the drought-relief program paid cash to farmers for everything from hail-damaged kiwi fruit in California to heat-stressed radicchio in Massachusetts, from water-logged tomatoes in New Jersey to washed-out bird-seed crops in Colorado.

The payments went far beyond the legislation's intent--to save Midwestern grain farms from bankruptcy. It was an effort--supported by almost everyone--that simply grew and grew and grew.

At each step in the legislative process, the program was broadened. Congress began with a bill to aid drought victims. The lawmakers added hail damage to the relief categories, then flood losses.

Next came "heat," added by the Agriculture Department.

By the time the checks were being written at the county level, farmers elected to administer federal agriculture programs locally were approving claims for common problems such as insects, sand, wind, cold and fungus, even "ineffective herbicide."

None of those conditions should have been eligible, administrators in Washington say. Nothing in federal procedures, however, requires paper work to be forwarded to higher officials for routine approval or checking.

By the end of October, about a quarter of all U.S. farmers had collected on damage to most of 506 eligible crops and just about any kind of weather in 49 states. The taxpayers' tab ran to $3.9 billion.

"We lucked out last year on account of the boys up north," said Travis Turnipseed, a Levelland, Tex., cotton farmer whose crops have been hit by hail in 23 of the last 28 years. He collected cash for hail damage the first time in 1988.

Loose regulations and lax enforcement of them were the major reasons for the government generosity, the AP found by examining federal records in 14 states through the Freedom of Information Act.

The politics of 1988 and the media attention the drought received--a steady bombardment of print and electronic images of shriveled cornstalks and dusty fields--were factors in the swift passage of the nation's largest disaster relief measure to date.

"Being an election year, there were a lot of concessions to farmers," said Dan Otto, a professor at Iowa State University. "(Politicians) were trying to get recognized as a friend of agriculture."

In the end, drought relief meant a one-time bonus for thousands of farmers in parts of the country that in 1988 generally enjoyed good harvests that fetched high prices and wouldn't have qualified as disaster areas. These included parts of California, Arizona, New Mexico, Texas, Oklahoma, Maryland and New Jersey.

Although some producers appeared to have been ineligible--some had more than the maximum annual income allowed, for example--their requests for aid were approved anyway. Most farmers simply took advantage of a generous program. As tough as farming is, they'd be fools not to take what was offered, they said.

"It was there, so I took it," said Melvin Przilas, a wheat and corn farmer in the Texas Panhandle who collected $2,254 because hail and Russian wheat aphids damaged crops on his 1,265-acre irrigated farm, which grosses between $300,000 and $400,000 a year.

Government officials say they did the best they could with a rushed program. Loopholes were narrowed the a smaller, $1-billion drought-relief program that was passed this year.

"Some farmers just got grandfathered in, that's true," said Dan Shaw, deputy administrator of the Agricultural Stabilization and Conservation Service, which administers payment programs for the Agriculture Department. "What percentage, we don't know, but that is part of the beast, I guess, that was created. Whenever you do this for the whole nation, there are some people that luck out."

Some farmers did better than just luck out. They profited from "triple-dipping," by collecting on crop insurance as well as drought aid for damaged crops, then re-planting for a successful harvest--all perfectly legal under the 1988 program.

Relief payments in several states also went to banks, corporations, investment firms, churches and local governments such as the city of Littlefield, Tex., despite regulations designed to reserve the benefits for small farmers.

In several cases, corporations ineligible for drought relief because of the $2-million limit on a farm's gross annual income collected anyway because they owned a stake in a farm.

Santa Fe Pacific Co., the railroad with annual revenue of $3 billion, received a check through its energy division. The American Cancer Society got a check, as did a unit of Texas A&M University and the Jesuits' mid-Atlantic headquarters in Baltimore.

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