The Hagstrom Report

Agriculture News As It Happens


Bipartisan bill would cap payments, close loopholes

Sen. Chuck Grassley, R-Iowa
Sen. Chuck Grassley
Sens. Chuck Grassley, R-Iowa, and Tim Johnson, D-S.D., today introduced a bipartisan bill that would place a hard cap on farm program payments in an attempt to close loopholes that allow big farmers to get payments the law says they are not supposed to get, The National Sustainable Agriculture Coalition said in a news release.

The Rural America Preservation Act should be included in the 2012 farm bill, NSAC said, noting that it is also sponsored by Sens. Sherrod Brown, D-Ohio, Kirsten Gillibrand, D-N.Y., Mike Enzi, R-Wyo., Tom Harkin, D-Iowa, and Ben Nelson, D-Neb.
Sen. Tim Johnson, D-S.D.

Sen. Tim Johnson
NSAC added that the bill is very similar to previous versions offered by Grassley during several previous farm bill debates, including one co-sponsored by former Sen. Byron Dorgan, D-N.D., but that it has been revised to ensure it is relevant to likely changes in commodity programs, including an end to direct payments and new commodity program payments.

“This bill is absolutely critical to targeting the expected $5 billion a year in 2012 farm bill farm payments to individuals actively involved in farming, with reasonable caps,” said Juli Obudzinski, policy associate at the National Sustainable Agriculture Coalition. “The current distribution of farm payments, with mega payments to mega farms and absentee passive investors, contributes to farm consolidation and the demise of family farms. The 2012 farm bill should put an end to this abuse."

The bill has two major provisions that, if enacted, will lower the per farm cap on commodity program payments and ensure that federal farm payments flow to working farmers, NSAC said.

The first provision would place a hard cap on commodity payments so that no farm couple can receive more than $250,000 per year in farm subsidies, capping payments at $100,000 and loan benefits at $150,000 a year.

Currently, there are much higher statutory limits on payments, and none at all on loan benefits. This provision is written so that it will apply regardless of any types of new payments Congress may agree to in the new farm bill.

The second provision addresses complaints about a requirement in the 2008 farm bill that people who receive farm payments be “actively managing,” which has proven ineffective. The provision would “strictly [limit] the circumstances under which individuals providing only management and no farm labor can benefit,” NSAC said.

“A farm safety net aimed at the farmers it was originally intended to help is crucial to ensuring a safe and stable food supply,” Grassley said, according to the NCAC news release.

“We simply cannot continue to see 10 percent of the biggest farmers get 70 percent of the farm payments,” Grassley said. “If we continue along this path, we're going to see support slide for a farm and nutrition bill, when it's just as critical as ever.”

“The farm safety net was designed to help family farmers but it has increasingly led to a windfall for owners of our nation's largest farms,” Johnson said.

“Congress should act to close the loopholes and better target payments to our small-and mid-sized family farmers,” Johnson said. “This legislation represents our best chance to move forward with reforms as consideration of the farm bill continues.”

The National Farmers Union also endorsed the Grassley-Johnson bill.

"Farm bill programs are designed to help protect farmers in times of need, not to make farmers and ranchers rich,” said NFU President Roger Johnson.