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Pay limits a thorn in farm bill negotiations

DANIEL LOOKER Updated: 11/06/2013 @ 12:12pm Business Editor

Last week the members of a House-Senate conference committee tasked with putting together a final farm bill talked a lot about bipartisan compromise at their first public meeting on October 30.

Aside from the well-publicized differences over cuts to food stamps -- $4 billion over 10 years in the Senate bill and nearly $40 billion in the House nutrition bill -- most of the potential sticking points to getting a bill passed this year aren't partisan. One is a provision that would finally close nearly all loopholes that allow very large farms to circumvent limits on commodity program payments.

Senator Chuck Grassley, the Iowa Republican on the Senate Agriculture Committee who has championed tighter limits for years, told reporters Tuesday that if the final bill doesn't have payment limits, "I probably will vote against it."

Grassley, who isn't on the conference committee, authored a provision in the Senate bill that puts a cap of $250,000 on the amount a farming couple could receive from programs in the bill's commodity title. That includes a limit of $50,000 per person on all commodity program benefits, except loan deficiency payments and marketing loan gains, which would have a separate cap of $75,000. Put those two together, and the individual cap is $125,000, or twice that for a husband and wife.

This doesn't affect crop insurance payments (which could be subject to different reforms), and with loan rates for most crops far below even today's falling market prices, the whole issue might seem theoretical.

But it's not to some members of the conference committee, mostly from the South, who Grassley said are the main opponents of payment limit reform.

The payment limit cap also closes a loophole that in the past has allowed 20 people tied to one farm to claim that they were making management decisions. According to a report released this fall to Grassley by the Government Accountability Office, a farm in Louisiana collected $651,910 in payments last year, with 16 individuals and four spouses claiming management of the farm.

Grassley's provision limits farms to only one off-farm manager.

Grassley has had support for his stricter payment limits from Senate Agriculture Chairwoman Debbie Stabenow (D-MI), but after reports of opposition by some House members of the conference committee, he and 10 other senators wrote Stabenow and the committee's ranking Republican, Thad Cochran of Mississippi, urging them to support that part of the bill.

"We believe farm programs should offer support in tought times, but like other economic safety nets, the assistance should be limited. The new limits have been approved by both bodies of Congress, and any changes by the conference committee would contradict the will of Congress…" said the letter, whose signers included Democrats from blue states, Al Franken of Minnesota and Kirsten Gillibrand of New York, as well as some of the Senate's most fiscally conservative Republicans, including Tom Coburn of Oklahoma. Former Agriculture Secretary Mike Johanns, another Republican member of the Senate Agriculture Committee, also signed on.

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