9 July 2011 - Time to end government farm payments?

We are in the beginning stages of writing a new Farm Bill, a Farm Bill that is due next year. Members of the House and Senate Agriculture Committees and the Department of Agriculture are discussing changes, listening to commodity groups, holding listening sessions to help mold the direction of the new Farm Bill.

While this is going on however, a bill was introduced last month that could have a major impact on the direction of the 2012 Farm Bill. It was introduced in the Senate, titled the Rural America Preservation Act, introduced by South Dakota Democratic Senator Tim Johnson and Iowa Republican Senator Charles Grassley. The purpose is to lower the payment cap on farm programs, better define the terms ‘farmer’ and ‘actively engaged’ and also make sure that money goes to support family farmers and not celebrities and corporate executives who own farms and receive large government checks. That has been a lightning rod for critics of farm programs over the past couple of decades.

Current law does attempt to target payments to family farmers but studies by GAO show the lack of a defined active management test in law and regulation is a major loophole allowing huge payments, so the Rural America Preservation Act would try to fix that loophole. The measurable standard by which the USDA determines who should receive farm payments will be updated.

‘Actively engaged’ is a legal term in farming and the bill states that “management be personally provided on a regular, substantial and continuous basis through direct supervision and direction of farming activities and labor and on-site (in other words, on-farm) services.” The combined labor and management standard is 1,000 hours annually or 50% of the share of the required labor and management.

Senator Grassley says “This is common sense. A person should be a farmer in order to receive farm payments.” I agree with the Senator and feel the bill has merit, but I would like your thoughts on the proposed legislation because if passed, it could have a major impact on the direction of the 2012 Farm Bill.

Of course, it has a long road to travel before it becomes law and it may never complete that journey. You can always share your thoughts with me at orion@agbizweek.com

My thoughts on Samuelson Sez.