Millions In Subsidies For Profitable Corn?

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On Ken McCauley's Kansas farm, corn is starting to look a little bit like gold, reports CBS News correspondent Chip Reid.

"It's a good year," said McCauley, "we have good yields good prices"

Two years ago, corn was about $2 a bushel. This year it briefly soared above $4 and is still sky high, over $3 a bushel, which means the corn on a 3,000-acre farm like McCauley's is worth about $450,000 more now than two years ago.

The price is so high because corn is hot, not only as food, but as fuel.

McCauley sends all his corn to the local ethanol plant, where it's turned into fuel for cars as part of a massive federal effort to reduce U.S. dependence on foreign oil.

Even dried-out corn is money in the bank for a farmer who sells it to an ethanol plant.

But what really has critics angry is that corn farmers are also still getting automatic subsidy payments from the federal government. Many get tens of thousands of dollars every year whether they need it or not.

The total cost to taxpayers is $2 billion a year.

Rep. Ron Kind says it's outrageous, and he's fighting to stop the payments. Many farmers, he says, are embarrassed to take the money

"A lot of my farm families and neighbors come up to me and say, 'Why are we getting these payments when prices are so good?' And I say, 'You're right, this is crazy.'"

But the corn payments live on because many members of congress insist they're still needed as a safety net.

Sen. Sam Brownback, who grew up on a Kansas farm, is one of them.

Asked how he can justify millions of dollars in taxpayer money going to corn farmers who are doing very well right now, Brownback says, "Because they were doing very poorly two years ago and next year they could do very poorly."

Brownback supports gradually moving toward a system where farmers get federal payments only when they need them, and Ken McCauley agrees.

"You'd be targeting the person who actually need the support," said McCauley.

But no one expects those tax dollars to stop flowing anytime soon.
Chip Reid