The Case for Farm Bill Payment Limits

  • The lack of effective payment limitations has caused federal farm programs to finance consolidation in agriculture and the elimination of mid-size family farms;
  • The lack of effective payment limitations has encouraged expanding large producers to bid farm program payments into higher cash rents and thereby reduce profit margins for all farmers; and
  • A shrinking budget for agriculture appropriations has led to cuts in federal funding for value added, rural development and conservation programs vital to the future of agriculture and rural America.

Therefore the solution is to close payment limitation loopholes, including:

  • Eliminate loopholes that allow mega farms to receive double the limit by dividing the operation between spouses or into multiple legal entities.
  • Strengthen the criteria for persons eligible for farm program payments by requiring significant active personal management and active personal labor in the farming operation. Continue the exemption for crop share landlords.
  • Gains on generic certificates and on commodities forfeited to USDA to satisfy marketing loans should count toward the limit on loan deficiency payments.

Payment limitations should be calibrated to provide equitable treatment to southern producers, for example by counting one dollar of cotton or rice payment as 50 cents toward the limitation. So calibrated, the limits would affect farms at comparable acreages and achieve comparable savings across commodities

Savings from closing these loopholes should be invested in expanding value added, beginning farmer, conservation and rural development programs that create a future in rural America.

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