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Senate defeats farm payment reform

After more than a year of bad press about commodity program payments going to wealthy residents of New York City and Houston-area ranchettes, the Senate backed away from putting a hard cap on those payments at $250,000 per couple Thursday.

The amendment to the farm bill that also would have limited payments to people actively engaged in farming fell short of the 60 votes needed to prevent a filibuster by its opponents, who included nearly all of the senators from the South.

The amendment, sponsored by senators Byron Dorgan (D-ND) and Chuck Grassley (R-IA) got 56 votes, including Democratic presidential candidates who returned to Washington. The opponents had 43, enough to force the Democratic party's leadership to withdraw it.

In a sometimes strongly worded debate Wednesday that preceded the vote, Dorgan said his amendment was about restoring the farm program to its original purpose of helping family farmers through tough economic times.

"I believe very strongly that if we do not do the right thing, one day we won't be talking about the farm bill because there won't be a farm bill," Dorgan said.

Both Dorgan and Grassley cited statistics showing that 73% of farm program payments go to just 10% of the farmers.

"Government payments were originally designed to benefit our small and medium-sized farmers but instead have gone to just the opposite," Grassley said.

Senators from the South, where farms are larger and crop values, until recently, have been higher, strongly opposed the amendment.

Senator Blanche Lincoln, an Arkansas Democrat on the Agriculture Committee, said she had talked to nearly every member of the Senate to voice her opposition.

Large farms get more commodity program payments because they produce most of those crops, she said. Citing statistics compiled by Kansas State University agricultural economist Barry Flinchbaugh, she said the farmers who produce 78% of commodities get only 58% of the payments.

If the payment limit amendment passed, her state would lose its rice industry, Lincoln said.

"It's going to go to Vietnam. It's going to go to Thailand," she said.

Her Arkansas colleague, Senator Mark Pryor, also a Democrat, agreed.

"Quite frankly, if this amendment is adopted, it will destroy the American cotton and rice industry," Pryor said, adding later that "if this amendment gets adopted, I can't support the farm bill."

With some southerners threatening a filibuster, the Democratic leadership agreed that the amendment would be withdrawn if it didn't gain 60 votes.

"It was just done all behind closed doors," said Ferd Hoefner of the Sustainable Agriculture Coalition, a group the represents small farm interests and was a strong supporter of the amendment. "It's just sad that a majority no longer counts for much in America’s democracy."

Hoefner's group was at odds with many influential farm organizations, including the largest, American Farm Bureau Federation.

In an interview Wednesday, before Thursday's vote, Farm Bureau president Bob Stallman, a Texas cattle and rice farmer, said, "We don't support payment limits or means testing at all. The counter-cyclical safety net is designed to support production agriculture in this country. If you produce more, under the counter-cyclical program, when prices are low, you’re going to get paid more."

In reality, if prices stay high, neither counter-cyclical payments nor loan deficiency payments are likely to be triggered under the new farm bill, but farmers will still get direct payments. The Dorgan-Grassley amendment would have capped those at $40,000.

Current law caps direct payments at $80,000, as would the Senate bill approved by it ag committee. A House bill passed last summer raises the limit on those payments to $120,000. Hoefner said that if the Dorgan-Grassley amendment had passed today, when a final bill was negotiated between members of the House and Senate ag committees, the cap likely would have been raised some. After Thursday's vote, it's possible that the cap will be raised to a level between $80,000 and $120,000.

Current law does require some involvement in farming to qualify for payments, but it can be just a telephone conference call a couple of times a year, Hoefner said. And new farm bill reforms touted by agriculture committee members, such as ending the three entity rule, apply only to farm corporations, Hoefner said.

The three-entity rule allowed a farm to set up two more business entities, each to collect half a payment, in effect doubling a farmer's eligibility for payments. Even with the reform, farms can use partnerships and limited partnerships to collect more payments, Hoefner said. Sometimes those partnerships are set up with employees or distant relatives.

If the Dorgan-Grassley amendment had passed, "you couldn't use employees and you couldn't use cousins and relatives who weren't working," to avoid payment limits, he said.

Some members of congressional agriculture committees have called on the USDA to tighten up eligibility for payments to only active farmers, but Hoefner said that two former agriculture secretaries who were critical of large payments, Dan Glickman and Mike Johanns, have already refused to do that without leadership from Congress.

"They both wrote to Congress and said no," Hoefner said.

"I hold out almost no hope that it will be changed administratively," he said.

One of the reasons backers of Dorgan-Grassley failed Thursday was that some members of the Senate who had supported payment limits for the 2002 farm bill changed their votes this year.

And they weren't necessarily from the South. North Dakota's other senator, Agriculture Committee member Kent Conrad, a Democrat, had already said he would vote against it.

Hoefner was surprised to see a no vote from two other Democrats on the ag committee, Senator Debbie Stabenow of Michigan and Senator Ken Salazar of Colorado. Stabenow voted for payment limits in 2002. Salazar wasn't in the Senate then but he campaigned for payment limits.

Editor's note: When this story was posted, calls to the press aides of both senators had not yet been returned.

After more than a year of bad press about commodity program payments going to wealthy residents of New York City and Houston-area ranchettes, the Senate backed away from putting a hard cap on those payments at $250,000 per couple Thursday.

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