The Environmental Working Group’s web site shows Riceland Foods Inc. as the top recipient of federal farm program payments from 1996-2000, receiving $49 million during the period.

The numbers provided on the web site have led to statements such as those made by Rep. Nick Smith of Michigan who said, “The top largest 5 percent of the farms receive 49 percent of the payments.”

Smith referenced the payments made to Riceland in statements on the floor of the House of Representatives on February 26 and March 6, 2002. Pointing to Riceland and other farmer-owned cooperatives, Smith said “These are mega-farm operations. These are huge landowners.”

Smith said the operations are not 400- or 500-acre farms, but 40,000- to 80,000-acre farms.

In a letter to Smith, Richard E. Bell, Riceland president and chief executive officer, said that, “Riceland Foods, Inc. has no farming operations. It is a farmer-owned marketing cooperative formed 80 years ago which markets rice, soybeans and wheat grown by its 9,000 grower-members.”

Bell said that Riceland owns 243 acres of farmland adjacent to its existing processing facilities in Stuttgart that eventually will be used for new processing and storage facilities. Riceland receives no government farm payments on the land that is rented to a grower-member.

Bell said one reason for the confusion in the farm bill debate regarding payment limits is because people do not understand the marketing pools used by cooperatives in the South, particularly those operated by rice and cotton cooperatives.

“Under the marketing pool concept, members deliver their crops to the cooperative where a professional staff markets them. Earnings and expenses are shared among pool participants on a per unit basis of crops delivered,” Bell said.

Bell noted that Riceland and other cooperatives receive marketing loan benefits from the USDA’s Commodity Credit Corporation (CCC) on behalf of the individual members participating in the marketing pools.

“These funds are distributed to individual members according to their deliveries to the cooperative,” Bell said. “The cooperative tracks marketing loan assistance payments due each individual member by using the payment limits information provided by the USDA for individual members.”

Bell said that marketing cooperatives handling CCC benefits for their members is not a new development. “The process has been in existence for probably more than 50 years,” he said.

He said that Riceland’s handling of marketing loan payments for members is subject to audit by both the CCC and the USDA’s Inspector General, as well as the General Accounting Office. He added, “None of the audits have discovered any irregularities. In fact, a GAO report issued a year ago commented on its efficiency.”

To see Smith’s comments, click on http://thomas.loc.gov/cgi-bin/query/D?r107:1:./temp/~r107z0t2Mz

e-mail: flaws@primediabusiness.com.