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Mar 21 2012

Grassley, Johnson Push for Legitimate Payment Limits in Upcoming Farm Bill Discussions

Senators Introduce New Legislation to Place Hard Caps and Close Loopholes

WASHINGTON – Senators Chuck Grassley and Tim Johnson today are introducing legislation that would place a hard cap on the farm payments an individual farmer could receive in a year and would close long-abused and well-documented loopholes in the farm payment program.

The new Grassley-Johnson payment limits bill sets a hard cap for farm payments of $250,000 per married couple, and closes loopholes that allow non-farmers to qualify for federal farm payments.

The senators had introduced similar legislation earlier this Congress, but wanted to be sure the legislative text would accommodate any type of safety-net program adopted in a new farm and nutrition bill.  This is particularly important in light of the growing prospect that direct payments are unlikely to be included in a farm and nutrition bill. 

“A strong safety net is critical to ensuring a safe and affordable food supply.  In order to maintain that safety net, we can’t have the mentality of the past where the government looked the other way and allowed people with no connection to the farm to take farm payments,” Grassley said.  “It’s unacceptable that small- and medium-sized farmers get so little of the very program that was created to help them.”

“The farm safety net was designed to help family farmers but it has increasingly led to a windfall for owners of our nation’s largest farms. Congress should act to close the loopholes and better target payments to our small and mid-sized family farmers. This legislation represents our best chance to move forward with reforms as consideration of the farm bill continues,” said Johnson.

Specifically, the new Grassley-Johnson payment limits bill has a hard cap on marketing loan gains of $75,000 ($150,000 for a couple).   The remainder of the payment limit would be a cap on the total amount a farmer can receive in safety-net payments in general.  For instance, if the Congress were to adopt a shallow loss program, the Grassley-Johnson bill would set a limit of $50,000 ($100,000 for a couple) that a farmer could receive.

In addition, the bill closes loopholes that allow people with ties to the farmland that consist of a conference call and nothing else.  The bill sets a measurable standard for someone to qualify as actively engaged in farming by providing management for the operation, and the bill provides an exception for farming operations where there is only one manager of the farm.  This exception should help the Department of Agriculture administer the standard.

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