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Senators want payments targeted to those who play active role in farming

Three senators who favor tighter limits on commodity program payments have asked the USDA to change the rules that define when a farmer is eligible to get those payments.

When the Bush administration published an interim rule on payment limits in December, it was vague about requirements for what it means to be actively engaged in farming.

Senators Chuck Grassley (R-IA) and Byron Dorgan (D-ND) and Senate Agriculture Committee Chairman Tom Harkin (D-IA) wrote Agriculture Secretary Tom Vilsack on Monday, asking him to implement the tougher rules mandated by the 2008 farm bill.

"The interim rule as written leaves a big loophole for so-called conference calls. These are farmers that just do a conference call," Grassley told reporters Tuesday.

In the past, that was enough for a city person with an interest in a farm to show that he or she was actively engaged in running a farm, and eligible for payments. The new farm bill requires those who get payments to contribute capital, equipment or land to a farming operation, in addition to personal labor or active personal management.

The senators want Vilsack to better define management.

"The farm bill didn't go as far as I would liked to have had it go in this area, but actively engaged is an area where we made some progress," Grassley said. "In order for the farm bill to continue to receive broad bipartisan urban and rural support, we need to make sure that farm program payments serve as a safety net rather than a boon to the biggest farmers and non-farmers."

Grassley and Dorgan have also introduced legislation to cap commodity program payments at $250,000, the same level that President Barack Obama proposed in his USDA budget for 2010. But Grassley said that idea died in the Senate Budget Committee, on a vote of 9 to 14. He said it would be possible to bring it up again this year during the appropriations process, but he didn't say if he plans to do that.

The 2008 farm bill eliminates direct payments to all farmers with farm income over $750,000, which is a reduction from a $2.5 million income cap in the 2002 farm bill. In the new farm bill, those with nonfarm adjusted gross income above $500,000 are ineligible for many program payments.

The Obama administration is already trying to prevent payments to those whose income disqualifies them for payments. Last month, Vilsack and Treasury Secretary Tim Geithner announced that beginning with the 2009 crop year, all farmers who want to be eligible for commodity program payments must sign a form authorizing the IRS to provide income information to the USDA.

That action was prompted by a government report last fall that the USDA had paid out more than $49 million to more than 2,500 individuals who had income above the old $2.5 million cap.

Some in Congress have objected to Vilsack's move to require income tax records to receive program payments. On March 25, Representative Frank Lucas of Oklahoma, the ranking Republican on the House Agriculture Committee, and eight other committee Republicans, wrote Vilsack to say that "Congress never intended such a blatant violation of privacy."

Instead of requiring IRS records, Lucas wrote, "Congress allowed for a verification of income statement, prepared by a certified public accountant or another third party acceptable to you, to be submitted every three years that confirms the producer's adjusted gross income which makes he or she eligible to receive payment."

Three senators who favor tighter limits on commodity program payments have asked the USDA to change the rules that define when a farmer is eligible to get those payments.

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