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End Farm Subsidy Payments to People Who Aren’t Farmers, Says Grassley

For years, reformers and government watchdogs have complained that it’s too easy to collect farm subsidies and that the rules determining if an individual is “actively engaged” in agriculture are unduly loose. Iowa Senator Charles Grassley, who nearly succeeded in tightening the eligibility rules for the 2014 farm law, says he’ll try again with the 2018 farm bill to end payments to city dwellers who never set foot on the farm or take no role in running it.

“I’m not going to give up until we can get this limit,” said Grassley during a weekly teleconference. “I am looking forward to working on this issue in the next farm bill.” The National Sustainable Agriculture Coalition, a small-farm advocate, applauded Grassley’s plan to “eliminate loopholes that make payment limit law a farce.”

At present, large operations can evade payment limits by declaring additional family members or business partners as managers who are eligible for crop subsidies. The USDA’s eligibility rules require people to provide land, capital, or equipment to the operation and to perform active labor or management to qualify for subsidies. There is no real definition of what constitutes management on family farms.

The House and Senate voted to include a Grassley proposal in the 2014 farm law that would limit farms to one manager. But the four negotiators who wrote the final version of the bill changed the provision into instructions to the USDA to look at tighter rules for nonfamily farms.

The change exempted 96% of U.S. farms. The USDA issued a rule in 2015 that allows up to three people to collect subsidies as managers of farms operating as joint ventures or limited partnerships. They are required to keep records to show they perform at least 500 hours or 25% of the management if they have been named the second or third manager of the farm. A list of critical management activities — such as hiring and directing farm labor, arranging financing, or marketing crops — was included in the rule, which took effect with 2016 crops.

Grassley told reporters that he would attempt to limit eligibility to one manager beyond the longstanding eligibility for a farmer and a spouse. An aide said the senator “is currently reviewing the narrow rules for payment limits that were implemented as part of the 2014 farm bill.”

There also is a forthcoming Government Accountability Office report that Grassley intends to review before he presents a detailed plan, the aide said. In 2013, the GAO said the USDA allowed “farming operation members to make contributions of management without visiting the operation, enabling individuals to live significant distances from an operation to claim such contributions.” In other instances, many family members were listed as managers. The GAO report called for changes in the definition of “actively engaged.”

FERN’s Ag Insider. Produced by FERN
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