Major Changes Made in Farm Bill Commodity Title

Payment reforms addressed in commodity title.

Published on: May 1, 2008

Several major changes were made to the commodity title during Tuesday's closed door session according to Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, and Senate Budget Committee Chairman Kent Conrad, D-N.D. Among the major changes, Harkin reported that an estimated 275,000 program acres nationwide could become eligible for planting non-program crops through two new, separate farm bill provisions.

The first provision would end farm program eligibility for landowners with 10 acres or less with crop base acres. Nationwide such small acreages account for a total of about 200,000 acres, Harkin said. Taking those base acres out of program eligibility resulted in a savings to help pay for the farm bill, but it will also mean the landowner can plant the acres to non-program crops such as organic crops, specialty and horticultural crops, or orchards.

Additionally, an agreement made Tuesday would authorize flexibility planting on a total of 75,000 acres divided in specified state programs. Farmers could plant non-program crops and forego their farm program payments in that crop year, under the provision. The provision would apply to 9,000 acres each in Illinois, Indiana, and Wisconsin; 1,000 acres in Iowa, 34,000 acres in Minnesota, and 4,000 acres in Ohio.

Program eligibility would be limited to those with non-farm, adjusted gross income of $500,000 or less. Farmers would begin to lose a percentage of their direct payments if their adjusted gross income rose above $950,000 a year. For each increment of $100,000 in additional AGI of farm income, the payment would be reduced by 10%.

In a first, Conrad says the AGI rules would also apply to conservation payments in the new farm bill.

Additionally, Conrad reported that the President's demand to reform the "beneficial interest" of grain used to secure marketing loans had been addressed. He reported that instead of the price "being determined on a one-day sale, it would have to be on a 30-day rolling average" to prevent farmers from being able to make windfall profits as happened during the market disruptions caused by Hurricane Katrina.

Source: Feedstuffs