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Grassley’s Farm Bill Challenge: Limit Subsidies to Actual Farmers

Senator Charles Grassley (R-IA) wants to tighten down access to U.S. farm subsidies, a lightning-rod issue as Congress tries to update ag and public nutrition programs this year. “Why can’t we require farmers who collect huge sums of money from the government to actually work on the farm?” said Grassley on Monday, arguing for a “hard” cap of $125,000 per person in annual payments and restricting payments to farmers, their spouses, and one manager per farm, regardless of size.

“I do not believe in unlimited subsidies, like are in the House farm bill,” said the senator during a speech at the think tank Heritage Foundation. The Senate Agriculture Committee is scheduled to vote on its version of the farm bill on Wednesday. It does not address farm subsidy limits beyond a provision to limit payments to people with less than $700,000 adjusted gross income. The limit now is $900,000 AGI annually and is doubled for a married couple. Grassley said he will offer his payment limit amendment at the committee meeting.

Lawmakers have tussled over so-called payment limits for decades. Large operators collect the lion’s share of subsidies because the payments are based on volume of production. If these large farms also have many people declared as “managers,” multiple people can claim a payment in the operation. Grassley, however, believes the payments should be directed to family-size operations. Defenders say crop subsidies are a small part of revenue for farmers and assure production of cotton, grains, and soybeans.

“The Heritage Foundation has made it perfectly clear that it opposes any safety net whatsoever for America’s farmers or ranchers because Heritage denies any unique risks to farming and ranching,” said Farm Policy Facts, a proponent of “a strong farm policy” in a recent essay. The group represents cotton, rice, sugar, wheat, and some corn growers, as well as farm equipment manufacturers.

The USDA has weak rules that allow operators to evade the nominal $125,000-a-year limit; they also allow payments to people, often relatives, who declare they are managers but provide little input. The Government Accountability Office reported last month that a corn, soybean, and rice operation active in the South and Midwest collected $3.7 million in 2015 through a web of two individuals and 32 corporations. The operation included 25 people plus 10 spouses who said they provided “active personal managment.”

“I am working with my fellow senators to fix this egregious loophole,” said Grassley, referring to USDA’s rules on who is “actively engaged” in farming and, thus, eligible for subsidies. During debate on the 2014 farm law, the House and Senate approved language similar to the new Grassley amendment, but it was deleted during the final round of negotiations on the farm bill. “You can’t make that stuff up, can you?” said Grassley wryly.

The Republican-written House farm bill, defeated a month ago, expanded the list of people eligible for subsidies to include cousins, nieces, and nephews and removed the $125,000 limit on payments to particular types of corporate farms, allowing each member of the entity to claim a payment. The House has until June 22 to try to revive its bill.

Scott Faber of the Environmental Working Group called the House bill “the23andMe bill,” a play on the name of a company that traces ancestry. Faber and Joshua Sewell of Taxpayers for Common Sense were panelists in a discussion following Grassley. The 2014 farm law made federally subsidized crop insurance the largest part of the farm safety net. “Let’s embrace it,” said Sewell. “Why do we have them (crop subsidies) at all?”

To watch a video of Grassley’s speech and the panel discussion that followed, click here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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