Green thumbs: the PiK and Roll and other scams from the farm belt; the ingenious ways farmers milk government subsidy programs.

• Author: Pasley, Jeffrey L.

GREEN THUMBS:

THE PIK AND ROLL AND OTHER SCAMS FROM THE FARM BELT

The Future Farmers of America wants its young members to have the rich experience of tilling the soil. So in its classrooms across rural America, 416,000 high-school-aged students learn the right time to sow, the best ways to reap, and the skill that every modern farmer needs--how to harvest cash from the federal till.

Today's FFA concentrates on the business side of agriculture, according to spokesman Jeri Mattics. In Princeton, California, the local FFA chapter enrolled their 60-acre rice field in the federal price support program--and received $7,087 from the U.S. Department of Agriculture, according to the National Taxpayers' Union. Princeton High's FFA advisor, Andy Ferrendelli, called it "a learning experience,' noting that "they go out and get loans just like other farmers around here.'

Students who learn to plow the markets and federal programs can win blue ribbons. Last year, FFA's fiber crop winner was Allen Lewis, a student cotton farmer from Tennessee. Lewis, a high-school senior, used all available government programs and reported profits of a little over $15,000 for his year-long project. In his own down-home way he told the judges, "The key is determining my break-even point . . . I analyze the market situation and act accordingly.'

The kids are learning just how rich the soil can be. Everyone knows about the growth of farm subsidies--which cost the federal treasury $26 billion last year and now account for nearly one-third of farmers' income. Less well-known are the financial gymnastics farmers go through to cash in. Unlike city-dwellers who need a helping hand, farmers do not receive their government aid in a tidy monthly check. The Agriculture Department has a labyrinth of programs to raise prices, cut acreage, and promote exports. It's a nutty system, which lets the wealthiest farmers reap huge benefits while the poor are not helped enough. It is also turning farming into a perverse game in which the farmer who survives is not necessarily the most productive, but the one most adept at exploiting loopholes in subsidy programs. Farmers who once spent their time figuring out how to get rid of grub worms and boll weevils now rise early to tap their PCs, calculating how to get the most from the federal government. "To put it very bluntly,' an Iowa farmer told the Des Moines Register, "if you're not farming the government today, you're not doing a very good job.'

Here are five ways farmers improve their government yields:

The Combo Platter

To play the farm subsidy game, you have to know the rules. They vary a bit depending on your crop, but for all of them, from sorghum to soybeans, from cotton to corn, there's just one object: manipulating the price.

Uncle Sam does that for you. In consultation with lobbyists and the USDA, the House and Senate agriculture committees set a "target price.' This is what all the interests agree farmers ought to get for their crops. Congress also sets a lower price, called the "loan rate.' This is supposed to approximate what farmers would get for crops under normal, if regrettable, market conditions. In fact, true market prices are usually, but not always, much lower than the loan rate.

Though created out of thin air in Washington, these two prices are as real to farmers as high and low tide are to fishermen. Farmers receive a "deficiency payment'--please don't call it a subsidy-- that is the difference between these government-invented prices. In June, the deficiency payment per bushel of corn was 75 cents, so the average large family farm, which produces 214,852 bushels of corn a year, was eligible for a $161,000 deficiency payment.

That's just for starters. Only a lazy farmer sits on his porch, counting his deficiency payments. The enterprising yeoman keeps the subsidy but also gets himself a loan from the government-owned Commodity Credit Corporation. The idea behind these loans is to give farmers enough money to keep them afloat until prices rise. That same farm was eligible for a $490,000 loan. The catch is, this loan rate happens to be 40 percent higher than the local market rate for corn. (The...