Bill introduced to amend farm payment system

Senator Sherrod Brown (D-OH) and Senator Chuck Grassley (R-IA) have introduced a bipartisan bill to amend the farm payment system and ensure taxpayer support is targeted to those actively engaged in farming.
The Farm Program Integrity Act would create a hard cap of $250,000 per year in total commodity support for any one farm operation and require subsidy recipients to be working farmers that spend half the year actively engaged in farm operations.
Currently, just 10 percent of farms receive 70 percent of farm payment subsidies.
“For years we’ve seen big farms get bigger while small and mid-sized family farmers in Ohio get squeezed,” Brown said. “Too often, farm subsidy payments go to those who don’t need the support or aren’t even engaged in farming. With this common sense bill we can ensure assistance is directed toward working Ohio farmers who need the support.”
Specifically, the bill:
• Retains the current law payment cap of $125,000 for an individual and adds a $250,000 hard cap for any one farm operation. Within that cap, marketing loan gains and loan deficiency payments would be capped at $75,000 per operation.
• Revises the “actively engaged in farming” provision to replace current law -- which requires at least 1,000 hours of labor or, instead of labor, an unquantified amount of “management” – with a requirement for 1,000 hours of labor and management in any combination (or 50 percent of their commensurate share of total farm labor and management requirements).
• Removes exemptions from payment limits for farms organized as general partnerships. In the late 1980s, Congress limited corporate farms to a single payment limit leading many to then reorganize as general partnerships to skirt the limit.
• Ends the special provision in current law that provides peanut farmers with double the payment limit of any other type of commodity farm. The bill would allow all family and extended family members to qualify as actively engaged in farming under the new labor and management rule and thereby be payment eligible.
As under current law, cash rent landlords are ineligible. The management loophole in current law and regulations result in the type of abuse reported by the U.S. Government Accountability Office (GAO) in its May 2018 Farm Program Payments report:
• $260 million in one year sent to absentee “managers” of general partnership farms who did not live or work on the farm;
• nearly $1 million a year given to each of the 50 largest farms in the country organized as general partnerships, with the largest one receiving $3.7 million in a single year;
• 150 general partnership farms having 11 or more absentee “managers” each receiving a separate payment limit. The situation has only worsened since that time as USDA rules and enforcement has weakened.
The current law loopholes provide mega farms with excessive government subsidies which can then be used to outbid everyone else, especially cash-strapped beginning farmers, to buy or rent farmland as it comes on the market.
Over time, this reduces economic opportunity in farming, stratifies wealth, makes it even harder for new farmers to get started, and harms rural economies and the vitality of rural communities.