Blog note

DIA harvested windfall from ag subsidies

Editor’s note:

The following article was published on the Independence Institute website in June 2009. Given the recent debates regarding land ownership around Denver International Airport, we thought it would be of interest to republish.

Over the course of 12 consecutive years beginning in 1995, Denver International Airport (DIA) has managed to rake in just under half-a-million dollars in commodity subsidies from the U.S. Federal farm program.

The airport owns roughly 18,000 acres of wheat fields adjacent to the main terminal property and runways.

While the dollar amount represents a very small fraction of the overall farm subsidy program, the receipts of that money essentially constituted nothing more than a windfall for the airport, because the airport was immune to rising or falling wheat prices.

Furthermore, the City of Denver tells the Independence Institute that the monies paid to DIA were not divided or split among the farmers working DIA lands. Instead, the monies were calculated into the airport’s annual net revenues.

icon_blog_note“[B]y doing this we are lowering the cost to the airlines which is passed on to the traveling public,” said Revekka Balancier, a communications official with Mayor John Hickenlooper’s office. By comparison, Boulder County has accepted $428 in federal farm commodity payments over the same time period.

Since 1995, DIA and/or the City and County of Denver has entered into fixed-payment leases with the farmers who are then free to maximize their profits on the open market depending on conditions. However, because the airport has entered into fixed-payment leases, it essentially insulates itself from the vagaries of agricultural market conditions, but takes in a windfall profit anytime the farm subsidy program offers a payment.

Commodity payments by year:

1995 – $38,578

1996 – $21,957

1997 – $34,807

1998 – $71,304

1999 – $78,438

2000 – $79,221

2001 – $64,988

2002 – $30,198

2003 – $14,938

2004 – $4,047

2005 – $6,681

2006 – $1,871

TOTAL = $447,028

“This is a perfect example of why we shouldn’t have farm subsidies,” said Linda Gorman, an economist with the Independence Institute. “These subsidies aren’t helping individual farmers because they raise the cost of land and most of the subsidies go to big entities like the City of Denver.”

A 2007 report from the Heritage Foundation echoes the statements from Gorman arguing that “…farm subsidy formulas are designed to benefit large agribusinesses rather than family farmers.” While DIA is certainly not an agribusiness, it’s clear that no individual farmer who entered into a lease with DIA received any of this money paid to the City and County of Denver.

While DIA did receive the $447,000 dollars as the landowner, the farmers working the land also received separate “operator” payments from the federal farm program simultaneously. However because those farmers also may have had other agriculture operations during the years they contracted with DIA, it is not known how much in subsidies those farmers collected for specifically working the DIA acreage.

Todd Shepherd is the investigative reporter for the Independence Institute in Denver, Colorado.  He is also the founder and editor-in-chief of “CompleteColorado.com.”  Send him tips at completecolorado@gmail.com.

free hit counters

Comments

comments

Comments are closed.