What is a Loophole Anyway?

Here at the Center we talk a lot about closing loopholes in current Farm Bill programs. Just this week we said:

The new [EWG] data illustrates how the nation's largest farms exploit loopholes to exceed the limits on farm program payments. It's time for Congress to close loopholes, make the paper limits real and stop subsidizing mega farms to drive their neighbors out of business.

But we might not always do the best job of explaining exactly what these loopholes are.

The current "limit" is $180,000 per farm. But under current law it is perfectly legal to subdivide your farm on paper into three "farms." The two additional "farms" can receive an additional $90,000 each for a total of $360,000. Very few farmers come anywhere close to the $180,000 per year limit let alone $360,000.

To get beyond $360,000 you can create "paper partnerships" and use "generic commodity certificates" - which are explicitly excluded from the payment limits language - to pretty much blow it wide open.

And that's what we're talking about when we say, "Close the loopholes and make the paper limits real."

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