FARM BILL PROJECT, Day 2 - Top susbsidy entity changes strategy

Bruce Rushton

Between 2003 and 2005, the University of Illinois collected nearly $1.2 million in farm subsidies, more than any other person or entity in the state.

“While I would agree that we got some big numbers, it’s roughly related to the 14,000 acres of farmland we have in Illinois,” said Kevin Noland, director of agricultural investment for the university. “That makes us one of the largest landowners in the state.”

Much of the property was bequeathed to the university by donors with the requirement that income from the land be used to fund scholarships or pay faculty, Noland said.

But the university probably won’t be collecting much from the United States U.S. Department of Agriculture in the future because it now rents most of its land to farmers for cash. Previously, the university had allowed farmers to work its land in exchange for a portion of the crop and profits.

Under USDA rules, subsidy recipients must have financial risk, so landowners who cash-rent land and get paid regardless of the weather or crop prices aren’t eligible for subsidies. Subsidies paid based on the number of acres owned  or leased are usually factored into rents, however, so the university still benefits indirectly from farm subsidies. By cash renting land, though, the university is losing the chance for big profits when commodity prices soar and harvests are good.

“Maybe this isn’t a year that’s working out best for us,” Noland acknowledged.

Still, Noland said he can’t envision the university going back to splitting crops with farmers. There’s a certain comfort that comes with getting checks instead of crops.

“I think, for one thing, it provides our departments with a more predictable cash flow,” Noland said.