Much-maligned cotton subsidies give cotton country a crutch to stand on through the recession

Subsidies prop up cotton country through downturn

NEW MADRID, Mo. — The white puff of cotton blooms cover Missouri’s Bootheel at harvest, filling both tiny planter boxes outside a Super 8 motel’s front door and nearby thousand-acre spreads. “Thank goodness they’re able to do it,” a radio deejay reminds listeners as farmers take their crop to the gin.

They can, thanks to millions in federal farm subsidies — payments critics say merely funnel money from taxpayers to already wealthy growers. But farmers and agricultural economists argue the subsides have cushioned cotton country — even in the Mississippi Delta, where poverty is a constant — against the ravages the recession.

“Those programs provided that stability out here that other parts of the country might not have experienced,” said Darren Hudson, an economist and director of the Cotton Economics Research Institute at Texas Tech University. “That stability provided by the programs helped buffer the region, helped buffer agriculture, which helped soften the blow to the overall region.”

The Associated Press Economic Stress Index, a monthly analysis of the economic state of more than 3,100 U.S. counties, indicates that they’re right. The Stress Index calculates a score from 1 to 100 based on a county’s unemployment, foreclosure and bankruptcy rates. The higher the number, the greater the county’s level of economic stress.

The top 50 cotton-growing counties, which are among the country’s poorest, have endured economic stress that’s essentially the same as the country as a whole. The national average county Stress Index score in November 2009 was 10.2, up from 5.2 in October 2007, when AP began tracking economic data for the index. In the 50 big cotton counties, the average stress score increased a smaller amount, from 5.9 to 10 in November.

Missouri’s Bootheel includes four of the top 50 cotton-growing counties. They’re all poor — with a per capita income that’s at least 30 percent lower than the U.S. average, according to the U.S. Census Bureau — and heavily dependent on agriculture.

But New Madrid County, for example, where the average worker makes just over $14,000 a year, had a Stress Index of 9.9 last November, below the national average of 10.2. Stoddard County, where per capita income is more than $19,000 a year, had a Stress Index score of 10.2 in November.

Neither came close to the Missouri counties hit hardest by the recession. Washington County in east-central Missouri had a score of 15.5 and Miller County in the dead center of the state had a score of 14.1.

Far to the south, counties in the rich Delta farm land of western Mississippi also showed resilience. The state’s top cotton producer, Bolivar County, had a score of 10.4 in November, compared to 19.25 for central Mississippi’s Clay County, which is far from the cotton fields.

Missouri’s Bootheel cotton counties received about $70 million in farm subsidies in 2008, most of it for cotton. Without that money, farmers and agricultural economists say there wouldn’t be much cotton grown — and no one feeding cotton to gins or buying six-figure cotton pickers from farm equipment dealers.

Rick Faulkner, a 58-year-old farmer who grows cotton, soybeans and corn just north of New Madrid, not far from the Mississippi River, received just under $900,000 in federal subsidies between 1995 and 2006, according to a database maintained by the Environmental Working Group, a Washington, D.C. group that has long fought against subsidies. 2006 is the most recent year for which payments to individual farms are available.

“And if we make the money, we’re gonna’ spend it,” Faulkner said, sitting in a lawn chair in his farm shop in early November, on the first day of a late harvest delayed by rain. “We’re not gonna’ hoard it up and save it — we just don’t do that.”

Charles Parker, who farms on 3,600 acres just outside Kennett in Dunklin County, is one of the Bootheel’s bigger growers. His farm was paid just short of $5 million in subsidies between 1995 and 2006, according to the Environmental Working Group. The 67-year-old Parker said that money creates jobs: five full-time employees, plus a couple of part-timers.

Then there’s a gin he owns with partners and a few warehouses. Between them, they employ about 15 full-timers and several dozen more when cotton is coming in at harvest. “In peak season … we’ll employ, you know, 80 people,” he said.

Given the amount of money invested, there certainly should be some economic benefit for the broader economy, said Ken Cook, the president of the Environmental Working Group and a longtime opponent of the federal crop subsidy system. But Cook said they don’t produce enough jobs or economic well-being outside of the farmers who receive the payments. He would rather the government offer smaller subsidies and spend more money on other programs, such as improving health care in agricultural areas such as the Bootheel.

“It’s not as if the case they’re making (is), ‘Give us this help now and we’ll take it from there.’ It’s, ‘We permanently need a subsidy program,’” Cook said. “You’re still going to get some support, but we just can’t be in there for every bushel and every bale.”

Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University, argues that much of what farmers spend goes to fertilizer and pesticide makers from outside the area. As economic stimulus, he said it would be more effective to give every Bootheel resident a check for $660, the amount the federal government spends per capita on farm subsidies here every year.

“If that was your goal, to stimulate the economy, then yeah, you’d probably get a little bit more bang for your buck,” he said.

But in places where cotton is the only industry, Texas Tech’s Hudson said, the subsidies both matter and have helped insulate the economy from the recession. Gaines County, Texas, is one of the top cotton-producing counties in the country, receiving almost $600 million in farm subsidies between 1995 and 2008. Its Stress Index score was a mere 6.28 in November.

“There is no other industry there. That’s it,” he said. “You’ve got the gin, you’ve the warehouse.”