Grassley revives bill setting hard caps for farm payments

By Bill Eby 

© Copyright Agri-Pulse Communications, Inc.


WASHINGTON, June 9 - Senators Chuck Grassley, R-Iowa, and Tim Johnson, D-S.D., introduced legislation Thursday that they say will cap total farm payments at $250,000, close loopholes that are being used to "game" the farm payment system, and target payments to actively engaged farmers "who need assistance getting over the bumps that come with ensuring a safe and abundant food supply."


The measure comes almost about 10 days after Rep. Tim Flake, R-, successfully amended the 2012 agriculture appropriations measure passed by the House Appropriations committee to limit farm payments to operators who have a total farm and off-farm income of $250,000.

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In a floor statement introducing the bill, Grassley said the original intent of federal farm programs "was not to help the big get bigger. But, the safety net has veered sharply off course." He said current policy allows 10% of the nation's largest farm operators to receive 70% of farm program benefits. "This puts our safety net at risk by reducing urban support for the farm bill and creating upward pressure on land prices . . . [and] creates a real barrier for beginning farmers."


He said the legislation he and Johnson introduced helps ensure that U.S. farmers contribute to global food security "while maintaining the farm safety net that allows the small and medium sized farmers to get through the tough times."


It's a measure Grassley has introduced often, gaining Senate approval in 2002 and 2007, but failing to get approval in the House. Johnson is the latest co-sponsor on the bill.


"Farm programs are going to be in for tough scrutiny as budget negotiators scour spending programs," said Johnson. He said payments of more than $250,000 to a farming operation "deserves to be" examined. "Farm payments need to be targeted to those who need it, the small and mid-size family farmers."


Specifically, the bill caps direct payments at $40,000; counter-cyclical payments at $60,000; and marketing loan gains (including forfeitures), loan deficiency payments, and commodity certificates at $150,000. It would also close what the senators call "loopholes that people are using to maximize their take from the federal government" by raising the standard used by USDA to determine farmers who are actively engaged in their operations.


The authors say the bill would save the federal treasury more than $1 billion over 10 years.


Ferd Hoefner, the policy director for the National Sustainable Agriculture Coalition, said the legislation is a start towards reform, and lauded the senators' effort to change "the vague and largely unenforceable regulatory standard for 'actively managing' farm operations [that] has foiled lawmakers' attempts to target payments to working farmers."


"In every survey and poll on this issue, the vast majority of farmers in all regions of the country support payment limit reform," Hoefner said. However, the measure has failed to become law due to what he called "the power and influence mega farms wield in Washington and within trade associations."


But Hoefner says times have changed "and fiscal pressures guarantee that commodity program policy is about to change." He said the only question is whether the cuts "will be taken entirely out of the hides of rank and file farmers or whether the nation's largest operations will finally be asked to share in the sacrifice and contribute to deficit reduction." While the Grassley-Johnson bill "is not all the reform that is ultimately needed, it is the critical and fundamental starting point for any real reform," he said.


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