Grassley Payment Limits Letter

March 26, 2008

Chairman Tom Harkin
Committee on Agriculture, Nutrition, and Forestry
Russell 328-A
Washington, DC 20510

Deputy Secretary Chuck Connor
U.S. Department of Agriculture
1400 Independence Ave., SW
Washington, DC 20250

Dear Chairman Harkin and Deputy Secretary Connor,

The purpose of this letter is to encourage a conversation between the two of you on the recently proposed four-point plan for payment limitations, both on its merits and in relation to the widely reported need to close a sizeable gap between funding levels and available offsets.

You both are acutely aware of our commitment to achieve payment limitations in the commodity program in the Farm Bill. This past winter Dorgan-Grassley received the support of 56 Senators, but fell short of the 60 vote super majority needed for passage.

The four-point proposal (attached) could correctly be called Dorgan-Grassley II. It attempts to get us closer to a politically acceptable compromise by:

  • Reducing payment limitations and income limitations only when prices are above target price, which should be acceptable to Chairman Peterson who has been willing to sacrifice all payments in years of high commodity prices;
  • Softening the impact of reduced limits on cotton, rice and peanuts in recognition of the differences between northern and southern agriculture;
  • Incorporating the Administration proposal to lower Adjusted Gross Income limits, but with a feature to increase the savings by reducing payments on cash rented land owned by high income landlords; and
  • Responding to the findings of the GAO and USDA Payment Limitations Commission by incorporating the primary control and actively engaged in farming provisions of Dorgan Grassley I.

In recent days, farm bill negotiations have clearly pointed to the continuing difficulty in finding acceptable financing mechanisms that meet the demands for farm bill funding. We believe that a sizeable amount of the gap might be found in adopting the four-point program.

In response to our request, the Congressional Budget Office estimated preliminary savings of $1.186 billion over 10 years for the four-point program.

We understand that the Center for Rural Affairs recently presented Senator Harkin with a revised version of the 4-point program that they believe would be scored in the range of $2 billion.

The farm program, as it currently exists, too often directs payments in amounts that defy common sense or logic. Limiting farm program payments is good government on its own merits. At a time when there is an earnest search to find savings that will allow the Farm Bill to move forward, we urge the two of you to give careful consideration to Dorgan-Grassley II.

We thank you for your attention to this matter and look forward to hearing back from you concerning discussions on the subject.


Charles E. Grassley
U.S. Senator

Byron L. Dorgan
U.S. Senator



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