[IFB’s fight for farmers’ rights supports legislation to prevent environmental improvement. The follow excerpt from Cedar Rapids Gazette, 4/30/2017, takes a deeper look at IFB. Kinseth]:
Farm Bureau flourishes as water quality flags
Powerhouse ag organization has millions in surplus, seven-figure executive pay
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.
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.”\
FINANCIAL SURPLUS
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
Farmer
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.”
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