116 3rd St SE
Cedar Rapids, Iowa 52401
Even as low commodity prices strap Iowa farmers and the Legislature pinches pennies to fund water quality initiatives, one agriculture group has been socking away tens of millions of dollars a year and paying its executives up to seven-figure salaries.
The Iowa Farm Bureau Federation, which will celebrate its centennial next year, is the alpha dog of agriculture, using its vast influence and money to 'help farm families prosper' — part of its mission — but also to ensure success for farm-related corporations like the Farm Bureau itself, a Gazette investigation shows.
Some Iowa farmers, even dedicated former board members, say it's time for the Farm Bureau to take ownership of the role agriculture plays in poor water quality and put its weight behind meaningful change to help the environment.
'I look at this as more of an issue for my daughter,' said Josh Nelson, a 35-year-old farmer from Belmond, about his 5-month-old. 'For her to be able to swim in the ponds around Belmond, I need to get my act together.'
The Iowa Farm Bureau started in 1918, one year before the American Farm Bureau was born. As a nonprofit, the Iowa group is exempt from income taxes.
Read more: Not-for-profit Farm Bureau sits on surplus
There are 100 county Farm Bureaus in Iowa — one in each of 98 counties and two in Pottawattamie County. Issues that resonate at the local level make it to state meetings where members vote on a platform that influences the organization's statewide agenda, explained Iowa Farm Bureau President Craig Hill during an interview at his southern Iowa farm.
Steve Swenka, a Tiffin farmer and cattle producer who has been vice president of the Johnson County Farm Bureau since 2010, underscored the value of the Farm Bureau for farmers: 'As long as you produce food or fiber, we will help you in any way we can.'
The Iowa Farm Bureau has more than 160,000 member families. Of that, 62,600 are actively involved in farming and may hold county or state office. The rest are associates, most of whom become members to buy Farm Bureau insurance.
Of the nearly $686,000 the Iowa Farm Bureau Federation PAC donated to Iowa political candidates from 2010 to January, GOP recipients outnumbered Democrats nearly 5 to 1 and overall got 15 times as much money, a Gazette analysis showed. The top three lawmakers to get Farm Bureau cash were Gov. Terry Branstad with $88,000, Iowa Agriculture Secretary Bill Northey with $43,000 and Iowa Sen. Dan Zumbach, R-Ryan, with $29,800, campaign records show.
Nelson, who raises row crops and hogs with several family members and has his own chemical-free vegetable farm, doesn't side with Farm Bureau politically, but likes the diversity of Farm Bureau members he met serving on the Wright County board from 2013-2015.
He's also glad the Farm Bureau stands up for rural America, often ignored or ridiculed.
'There are people who would argue they are wielding undue influence,' he said. 'But it's one of the most effective organizations I've seen.'
Member dues of $30 to $55 a year make up about 4 percent of the Iowa Farm Bureau's annual revenue, which was a whopping $88 million in 2015, according to forms the nonprofit is required to file with the IRS and make public. At that time, the organization had $1.36 billion in net assets — which includes 60 percent ownership of the Farm Bureau Life Insurance Company, founded by the federation in 1939.
The Iowa Farm Bureau spent $31.5 million in 2015, with the largest line items listed as employee compensation at $8.2 million, publications at $4.2 million and grants and other assistance at $2.8 million.
That year, the Farm Bureau had 34 people paid $100,000 or more, including two executives — Executive Director Denny Presnall and General Counsel Ed Parker — who each got more than $800,000 in total compensation, the records show.
After expenses, the Farm Bureau had $56.4 million left over in 2015, which Hill said the group put into savings. In fact, from 2013 through 2015, the Farm Bureau banked nearly $170 million in surplus revenue.
'The goal is to create an endowment fund of diversified investments to support our activities,' Hill said.
The Farm Bureau started stockpiling after the 2008 recession walloped the insurance industry.
'Our stock value went down to single digits,' said Hill, referring to Farm Bureau Life, which he serves as chairman. 'We were around $2 per share at the depths of the 2008 financial crisis. We nearly lost our investment as a result of that crisis.'
As the economy improved, Farm Bureau Life stock climbed out of the cellar.
'That fear created by the financial crisis gave us a pause to think and rethink about our investments,' Hill said. 'We're trying to put money into more diversified portfolios so we don't have all our eggs in one basket.'
In September 2013, Farm Bureau Life increased its quarterly dividends, declared a special dividend and sold additional shares of stock, which together generated more than $65 million more for investors, including the Farm Bureau, Hill said.
Executive pay not set by members
Those moves made 2013 a banner year for the federation, which reported $110.4 million in revenue. That year, five Farm Bureau executives each received more than $800,000 in total compensation, with Chief Financial Officer/Controller James Christenson making $2.2 million and Field Services Director Duane Johnson making $1.06 million, records show.
'Our membership probably does not know what those executives are earning,' Hill said.
'It's no secret it's a wealthy organization, but I don't think they (farmers) quite would realize the amount of money being dealt with in the Farm Bureau.'
- Josh Nelson
A 100-member voting delegation sets compensation for Hill and other state board members, then the state board decides how much to pay the executives.
Several Iowa farmers said they were surprised by the hefty compensation for a group that represents farmers, who had a 2016 median income of $66,000 nationwide, according to the U.S. Bureau of Labor and Statistics.
'That's something that needs to be exposed,' said Chris Petersen, 62, a hog farmer from Clear Lake. He was on the Cerro Gordo County Farm Bureau many years ago but dropped his membership in 2000 over what he saw as the organization's focus on large producers and agriculture-related companies.
'I've heard a lot of complaints about the Farm Bureau being top heavy,' Nelson said. 'It's no secret it's a wealthy organization, but I don't think they (farmers) quite would realize the amount of money being dealt with in the Farm Bureau.'
Policy and politics
The Farm Bureau's tax forms do not list how much the group spent on lobbying in 2015, but the organization had five registered lobbyists at the Iowa Statehouse in the 2017 session.
Farm Bureau lobbyists declared themselves on a host of issues — and not just those directly involving agriculture.
The organization opposed a repeal of the 5-cent bottle deposit and a bill that would have allowed counties to collect more property taxes for mental health services. Neither bill advanced.
The Iowa Farm Bureau did not register for or against House File 597, a GOP-sponsored bill that would have phased in a three-eighths cent sales tax hike over three years, while reducing income tax, to raise about $180 million annually for conservation efforts, particularly for water quality. The bill didn't pass.
But the Farm Bureau opposed a 2010 constitutional amendment ballot measure to create the Iowa Water and Land Legacy that would have been funded with the sales tax. Sixty-three percent of voters approved the amendment.
'We didn't feel like we should have referendums authorizing budgets — it should be legislators,' Hill explained. 'The second issue was the formula. We didn't think the formula put enough money toward conservation.'
The Farm Bureau since has softened its stance, saying it wouldn't fight 'new money' if 'existing money' can't be found, Hill said.
The Legislature scraped up $5.2 million this year by cutting other programs. But that's only a sliver of the $77 million a year estimated to be needed to help Iowa meet its goals of reducing nitrogen and phosphorus in waterways.
Water Works dispute
Hill downplays the Farm Bureau's role at the Statehouse, rejecting rumors the group was behind a bill to disband the Des Moines Water Works, a public utility that sued Sac, Calhoun and Buena Vista counties for nitrates and other pollutants sent downriver. Water Works claimed it would have to spend millions to remove the nitrates to meet federal standards.
But one can see why Water Works officials and their supporters think the Farm Bureau was pulling strings. After all, the Farm Bureau and other ag interests pledged to pay the counties' legal bills, requiring county officials to deny farmers had any liability for pollution, according to Pulitzer Prize-winning editorials by the Storm Lake Times' Art Cullen.
The Farm Bureau also founded the Iowa Partnership for Clean Water, a group that spent more than $750,000 in 2015 and 2016 on TV ads in Des Moines and Cedar Rapids/Waterloo bashing the Water Works and its Chief Executive Officer Bill Stowe for the lawsuit, a Gazette review of the TV stations' disclosure files show.
'Farm Bureau is more interested in dismantling Water Works and running a negative ad campaign than registering there is a problem' with water quality, Stowe said. 'There is a real public health problem that is reaching a crisis.'
Cedar Rapids Mayor Ron Corbett is president of the Iowa Partnership's three-person board and agrees with the Farm Bureau that the Water Works lawsuit — recently dismissed in Polk County — was the wrong approach by pitting farmers against cities.
'The city of Cedar Rapids has a huge agricultural base with Cargill, ADM and Ingredion,' Corbett said. 'I was concerned about the chilling effect of the lawsuit on the state of Iowa.'
But Corbett has distanced himself from the Farm Bureau on the three-eigthths cent sales tax that would have funded water quality efforts. He promoted the idea to a half-dozen county Farm Bureau groups this spring.
'Never once has the environment been put first,' he said. 'It seems like it's always at the bottom of the totem pole and gets squeezed out.'
Hill knows Iowa has committed to reducing nitrates and phosphorus washing into the Mississippi River by 45 percent in order to help reduce the size of an oxygen-depleted 'dead zone' in the Gulf of Mexico where fish, shrimp and other organisms can't survive.
Nitrates in drinking water also have been linked to human health problems, including infant methemoglobinemia — blue baby syndrome.
Data released last month by the Iowa Water Quality Information System show 40 percent of the 61 sensors that were in Iowa's streams and rivers in 2016 had an average daily concentration of nitrates above the federal drinking water standard of 10 milligrams per liter.
While the Farm Bureau gives nods to water quality efforts — donating at least $3 million in the past five years to programs including Trees Forever, Iowa Wetland Mitigation and the SHARE fund — the organization is reluctant to acknowledge water quality as a major issue.
'Nitrates are overstated as a problem,' Hill said, who also said he doesn't see the need for regular nitrate testing.
'If you want to go out and dip water from the river and say next week, next month or three years from now, 'here's a change,' we're not going to be able to do that. The way you measure improvement is by practices you put on the land.'
A 2016 survey showed nearly 20 percent of Iowa farmers had, since 2013, increased cover crop plantings, shown to curb soil loss and nutrient pollution. More than 35 percent of respondents had boosted their use of structural conservation practices, such as terraces, grass waterways or stream buffer strips.
The Farm Bureau's mixed signals and backstage maneuvers at the Statehouse frustrate some farmers.
'A farmer alone runs out of time,' said Loyd Johnson, 60, who owns Bloomin' Wooley Acres, a vegetable farm near Nashua.
'The Farm Bureau has led a great number of producers in this state to a level of wealth that is very precarious,' he said. 'They've been very partial with our Legislature to protect that economy. But it becomes more hazardous to people's health.'
Ralph Rosenberg, executive director of the Iowa Environmental Council, said if the Farm Bureau chose, it could supplement paltry state funding for water quality projects in targeted watersheds that can be monitored for improvements. 'It's not unknown for the private sector to do parallel efforts,' Rosenberg said.
Nelson, the Belmond farmer, just wants to see action.
'Farm Bureau has been like molasses in January when it comes to water quality,' he said. That's one reason he left the county Farm Bureau board and now invests more time in the Iowa Soybean Association, which he sees as more progressive. Nelson also is a member of the Practical Farmers of Iowa.
'Craig Hill, (Vice President) Tim Heinrich, the delegates, they're all older,' Nelson said of the Farm Bureau. 'The younger generation is willing to try things.'
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