Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Tuesday 02/12/13

Senators Introduce Payment Limit Legislation

Four senators have once again introduced legislation to cap the level of payments a farmer can receive.

(For the sake of disclosure, last week I tweeted that Sen. Charles Grassley told reporters that the federal government needed to cut spending, but then he went into a long defense of farm programs. This week, Grassley called me out for that tweet in a conference call in which he introduced a new payment limit proposal.)

Sens. Grassley, R-Iowa, Tim Johnson, D-S.D., Mike Enzi, R-Wyo., and Sherrod Brown, D-Ohio, introduced the "Farm Program Integrity Act of 2013" on Tuesday as a marker for the next farm-bill debate in the Senate. The legislation is the same as caps put into the Senate version of the farm bill last year, though the House Agriculture Committee declined to match the Senate provisions.

The bill only applies to commodity programs and would not affect subsidies or payments under the conservation or crop-insurance programs.

The legislation would establish a per farm cap of $50,000 on all commodity program benefits, except those associated with the marketing loan program (loan deficiency payments and marketing loan gains), which would be capped at $75,000. Thus the combined limit would be $125,000, or, for married couples, $250,000.

The $50,000 cap would apply to whatever type of program is developed as part of the new farm bill.

The bill also works on the "actively-engaged" language for receiving farm-program payments. The provision prevents non-farmers from being able to use the management loophole in current law.

Grassley said, “A strong safety net is critical to ensuring a safe and affordable food supply. The Senate-passed farm bill made some important strides in this area, so it’s important we retain and build on those provisions. Ending some of the most egregious abuses of the farm program will ensure that the farm program payments are going to those who need them most. It’s unacceptable that small- and medium-sized farmers get so little of the very program that was created to help them.”

Johnson said, “Ensuring our farm program payments are directed to the small and medium sized family farmers is a concept that folks from both sides of the aisle support. We face a number of difficult budgetary challenges, and establishing a hard cap on payments and closing loopholes within the program will help to reduce the deficit while also reaffirming the legitimacy of our farm programs."

Enzi said, “The federal government shouldn’t be in the business of sending taxpayer dollars to farm operations who don’t need it. This bill would help make the system more reasonable and builds on the substantial reforms Congress has taken to eliminate abuse and provide a farm-safety net to the farmers at greatest risk. I’m pleased we have bi-partisan support for this legislation.

Brown said, “While big farms get bigger while small and mid-sized family farmers get squeezed. For too long farm program payments have gone to producers who do not need the support—and sometimes to people who are not involved in farming. The provisions in the Senate-passed farm bill and the bill we are introducing today are common sense solutions designed to ensure assistance is directed to those who need it most.”

I can be found on Twitter @ChrisClaytonDTN

Posted at 4:51PM CST 02/12/13 by Chris Clayton
Comments (5)
So the senators are going to continue to target the largest operations with multimillion dollar investment/profit guarantees as well as annual individual federal crop insurance subsidies at a million dollars plus and we are supposed to think they are serious about helping smaller farmers?
Posted by Lon Truly at 7:16PM CST 02/12/13
A vivid example of the lethal impact on smaller farmers of congress targeting the largest farmers with multimillion dollar investment/profit guarantees is the debacle occuring now in sw Michigan. Bankers eager to cash in on congress's open ended crop insurance guarantees engaged in pedal to the metal lending with a 40,000 acre plus farmer named Mike Stamp. In order to grow his operation to this size a large number of smalller farmers were outbid by Mr. Stamp for rental land and were forced to downsize their farming operations. This past year Mr. Stamp was one of three finalist for Top Producer's Top Producer of the year award. Before the year ended Mr. Stamp had filled for bankruptcy. If congress was not engaged in this insane pedal to the metal investment/profit guaranteeing business to the largest farmers, smaller farmers would have been most likely able to hang on to their operations. Internet search engines provide many details of the ongoing bankruptcy and the numerous small farms and farm input suppliers being hurt by this action by congress providing multimillion dollar benefits to the large farmers such as Mr.Stamp. Lenders would not be engaged in such extremely reckless lending practices if not for the .massive investment/profit guarantees by congress to one individual.
Posted by Lon Truly at 8:32PM CST 02/12/13
Another narrative of how congress is destroying smaller farms with nearly unlimited investment/profit guarantees for some of the largest operations is documented with the following link.http://www.agweb.com/farmjournal/arti...
Posted by Lon Truly at 8:34PM CST 02/12/13
A better link may be http://www.agweb.com/farmjournal/article/high-profile_crash_of_a_titan/
Posted by Lon Truly at 4:29AM CST 02/13/13
This is a disgrace to the hard working farmers who love the land. they don't get rich, they just try to hold on. When farming is in your heart and soul, it's a slap in the face.
Posted by Nina Walker at 4:39AM CST 02/23/13
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