Leaders of the Senate Agriculture Committee have agreed to include tougher commodity program eligibility rules proposed by Sen. Chuck Grassley, R-Iowa, in the farm bill the Senate is debating this week.
The Grassley provisions were added to a 1,219-page substitute text for the bill approved by the committee and will set up a sharp conflict with the House-passed farm bill, which would loosen eligibility rules and payment limits.
The amendment would tighten the definition of farm management for the purpose of qualifying for commodity programs. Farm operations would be restricted to having one non-farming manager who could qualify for $125,000 a year in subsidies as a manager.
The definition of active farm management would require payment recipients to provide at least 500 hours of management for the farm annually or to provide at least 25 percent of the total management hours required for the operation.
The Grassley amendment “makes the payment limit a real limit,” said Ferd Hoefner, senior strategic adviser to the National Sustainable Agriculture Coalition.
“This is a big win for family farms, rural communities, beginning farmers, and good government," Hoefner said. "The Senate action today establishes a clear choice for conference – adopt real reform or sell out to mega-farms and Wall Street investors.”
The future of the Grassley provisions in negotiations with the House is uncertain. Asked by Agri-Pulse if he would advocate for them in the House-Senate conference committee, Senate Agriculture Chairman Pat Roberts, R-Kan., responded: "To be determined." Roberts said he agreed to include the language in the substitute bill text to avoid a contentious floor debate.
Grassley’s provisions include language that the Senate adopted in 2013 but was later watered down during negotiations with the House.
Among the payment provisions in the House-passed bill is one that that would expand a family farm exemption to the “actively engaged” requirement to include nieces, nephews and cousins.
The House bill also would:
- Allow owners of LLCs and S corporations to qualify to receive up to $125,000 in payments per year. Currently such pass-throughs are subject to a single $125,000 payment limit. House Agriculture Committee Chairman Mike Conaway believes that would ensure that LLCs and S Corps are treated the same as joint ventures and partnerships, providing farmers more freedom in how they structure their operations.
- Exempt pass-through entities from the existing means test, which bars subsidies to individuals with adjusted gross income of more than $900,000 a year. The Senate bill retains the means test and would lower AGI limit to $700,000.
- Remove the payment limit on marketing loan gains.
The Grassley provisions were one of 18 amendments included in the substitute bill submitted by Roberts, R-Kan., Wednesday morning.
Among the other amendments included the substitute bill are proposals by:
- Sen. Diane Feinstein, D-Calif., to raise the catastrophic coverage level under the Dairy Risk Coverage program, renamed from the existing Margin Protection Program, to $5 from $4.
- John Tester, D-Mont., to allow counties to be divided into administrative units for calculating support under Agriculture Risk Coverage county coverage.
- Cory Gardner, R-Colo., to modify the Conservation Reserve Program and the Environmental Quality Incentives Program to address drought and water conservation.
- John Cornyn, R-Texas, to allow the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program to fund inspections for cattle fever ticks.
Roberts attempted Wednesday afternoon to bring two more amendments to the floor for separate votes, a proposal by Richard Durbin, D-Ill., and Grassley to impose a means test on crop insurance and another by Mike Lee, R-Utah, and Cory Booker, D-N.J., to restrict the operations of checkoff programs. But Sen. Marco Rubio, R-Fla., blocked consideration of both amendments, demanding approval to debate his proposal to restrict trade promotion spending in Cuba.
Roberts earlier told reporters that an amendment by Jeanne Shaheen, D-N.H., and Pat Toomey, R-Pa., to roll back the sugar program was likely to get a vote. Roberts said Toomey had insisted on getting a vote on the sugar amendment.
Roberts said Shaheen was withdrawing her proposal to cap the amount of premium subsidies a crop insurance policyholder could receive.
Download and read the substitute text here.
(Updated at 4:15 p.m. with Rubio blocking additional amendments from being considered.)
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