Farm Bill Payment Limit Proposed

DC Dialogue

Sens. Grassley and Johnson introduce hard cap on commodity payments in farm bill of no more than $250,000 and tweaks who can receive payments.

Published on: April 13, 2012

On Wednesday, March 21, long-time advocate of tighter payment limits Sen. Chuck Grassley, R-Iowa, along with Sen. Tim Johnson, D-S.D., introduced a bipartisan bill that would place a hard cap on farm payments and close current loopholes to ensure payments flow to working farmers. 

The Rural America Preservation Act (RAPA) was previously introduced in June 2011, but key revisions have been made to ensure that the bill is relevant to likely farm bill changes in commodity programs, which will almost certainly include an end to direct payments and enactment of new types of payments to take their place. The bill is also sponsored by Sens. Brown, D-Ohio, Gillibrand, D-N.Y., Enzi, R-Wy., Harkin, D-Iowa, and Nelson, D-Neb.

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. Currently, there are much higher statutory limits on payments, and none at all on loan benefits. 

Specifically, the new Grassley-Johnson payment limits bill has a hard cap on marketing loan gains of $75,000 ($150,000 for a couple). The remainder of the payment limit would be a cap on the total amount a farmer can receive in safety-net payments in general, a statement from Grassley’s office stated. For instance, if the Congress were to adopt a shallow loss program, the Grassley-Johnson bill would set a limit of $50,000 ($100,000 for a couple) that a farmer could receive.

In addition, the bill closes loopholes that allow people with ties to the farmland that consist of a conference call and nothing else. The bill sets a measurable standard for someone to qualify as actively engaged in farming by providing management for the operation, and the bill provides an exception for farming operations where there is only one manager of the farm. This exception should help the Department of Agriculture administer the standard, the Grassley statement pointed out.

The National Sustainable Agriculture Coalition said closing the current management loophole is widely viewed by commodity program and legal experts as the linchpin to any attempt to stop current abusive practices that allow absentee and largely passive investors to receive millions of dollars in taxpayer subsidies. NSAC said RAPA is a “cost-saving proposal that restores common-sense rules to farm programs.” 

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  1. Anonymous says:

    Why would a family farm still survive? You can't buy a worn out combine or tractor for less than $50,000 and if you do it'll cost another $50,000 to keep it running. A hardcap limit is only a subsidy for the small farmer which is good. Because the larger farms can't always sell their scrap metal.

  2. Anonymous says:

    Great idea That cap amount would cover most family farms, if your a bigger farmer than that you are getting more like a corprate farm. Which allows you to use your buying power to get price breaks any how.. NOW go tackle the oil industry and hold them accountable.