Center for Rural Affairs Urges Farm Bill Veto; Commends Senator Nelson for Rural Development Efforts

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Chuck Hassebrook, Phone: (402) 687-2103 ext.1018 Dan Owens, Phone: (402) 687-2103 ext.1017
Lyons, NE - Today the Center for Rural Affairs announced their opposition to passage of the farm bill conference report and encouraged President Bush to veto the bill if it passes.
"We urge Congress to vote against this farm bill and we encourage President Bush to veto it. This farm bill commits the federal government to subsidizing the destruction of family farming for another five years and it invests little in the future of rural communities," said Chuck Hassebrook, Executive Director of the Center for Rural Affairs.

Hassebrook said, "The farm bill funds just one new rural development initiative - the Rural Microentrepreneur Assistance Program - which provides loans, training and technical assistance to rural small businesses. The Center for Rural Affairs commends Senator Ben Nelson for championing the program. It creates genuine opportunity for rural people and a future for their communities. It was only Nelson's insistence with Congressional leaders that saved the program, after it was initially dropped."

"The new farm bill breaks faith with rural America and reflects a failure of leadership by both Congress and the Administration. Congress produced only the illusion of reform to provide political cover for its failure to adopt real reform. The Administration talked reform, while refusing to support the one true reform on the table - the Dorgan Grassley amendment - and refusing to use its existing administrative authority to close payment limitation loopholes," explained Hassebrook.

The Center's analysis of payment recipients ( found that over 99 percent of farmers affected by the payment limitation provisions in the conference report would continue receiving the same large direct payments by switching to other means of exceeding the paper limits on payments. The analysis found only five farmers in seven leading farm states (which include OK, ND, IA, GA, KY, MN, MT) that would face any cut in direct payments under the direct attribution provisions of the farm bill conference agreement.

"Closing one gate while leaving two open won't keep the hogs out of the trough," added Hassebrook.

The Center also offered the following evidence that the equally flawed means test (AGI) provisions are no more effective at denying payments to high income recipients:

1) Senator Chuck Grassley's analysis of U.S. Internal Revenue Service data revealed that about 40percent of those who would lose farm payments under the income limits are landlords who will switch to cash rent arrangements. The federal checks will now be sent to tenant farmers, but high income landlords will still capture them through top dollar cash rents.

2) High income farms will divide income between spouses to stay below the limits. Rich couples can put their multimillion dollar income in one spouse's name and the farm in the other. For example, Nancy Pelosi is the 15th richest member of Congress, but according to her financial disclosure reports, she'd be eligible for payments. That is because most of the couple's investments are not in her name.
3) Large farms that approach the income limit will get around it by expanding their operation - purchasing land and other assets to create deductions for interest, depreciation and inputs. Secretary Schafer got it right when he said recently that "If there is a farm in America that can't meet a $500,000 hard cap, they need a new accountant." (The cap in the final legislation is even higher.)

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