Senators Push for Payment Limitations in Farm Bill Discussions

Grassley, Johnson bill would place hard caps and close loopholes in farm policy.

Published on: Mar 21, 2012

Senators Chuck Grassley, R-Iowa, and Tim Johnson, D-S.D., introduced the Rural America Preservation Act of 2012 Wednesday morning. The bill would place a hard cap on farm payments an individual could receive in a year and close loopholes that allow non-farmers to qualify for farm payments.

"A strong safety net is critical to ensuring a safe and affordable food supply. In order to maintain that safety net, we can't have the mentality of the past where the government looked the other way and allowed people with no connection to the farm to take farm payments," Grassley said. "It's unacceptable that small- and medium-sized farmers get so little of the very program that was created to help them."

Bill caps payments and closes loopholes.
Bill caps payments and closes loopholes.

The new Grassley-Johnson payment limits bill sets a hard cap for farm payments of $250,000 per married couple. The senators had introduced similar legislation earlier this Congress, but wanted to be sure the legislative text would accommodate any type of safety-net program adopted in a new farm and nutrition bill.

"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. This legislation represents our best chance to move forward with reforms as consideration of the farm bill continues."

Specifically, the 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.

In addition, 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.

"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 payments to absentee passive investors, contributes to farm consolidation and the demise of family farms.  The 2012 Farm Bill should put an end to this abuse."