NSAC's Blog


Release: USDA Proposes to Continue Farm Subsidy Abuse

March 25, 2015


March 25, 2015, Washington, DC – Yesterday USDA issued the long awaited proposed rule to reform farm subsidy payments.  Sadly, the proposed changes to the “actively engaged in farming” rules amount to very little in the way of real reform, missing the best chance yet for President Obama to make good on his number one agricultural policy platform proposal.  The National Sustainable Agriculture Coalition will be encouraging family farm advocates across the country to make their voices heard during the 60 day public comment period: continuing to allow for payment limit abuse to foster mega farms is unacceptably bad public policy.

Bipartisan majorities in the House and Senate have approved closing the loopholes in the “actively engaged” rules and tightening payment limitations.  Early in 2014, however, in the waning minutes of behind closed doors negotiations of Agriculture Committee leaders, this farm bill reform was overturned, payment limits increased, and changes to the actively engaged in farming rules punted to USDA.

In fielding that punt, USDA has decided to surrender its authority to effectively implement the law of the land limiting commodity payments to those actively engaged in farming and, instead, to only do the minimum the farm bill conference report asked of them.  By surrendering its authority, the Department has reversed the President’s campaign pledge.

At the very top of his farm and rural platform (Obama-Biden: Real Leadership For Rural America), Candidate Obama wrote: “The lack of effective payment limitations has resulted in federal farm programs financing farm consolidation and the elimination of many mid-size family farms….Barack Obama and Joe Biden will close the loopholes that allow mega farms to get around the limits by subdividing their operations into multiple paper corporations.  They will take immediate action to close the loophole by proposing regulations to limit payments to active farmers who work the land….Every President since Ronald Reagan has had the authority to close this loophole without additional action by Congress, but has failed to act.” (emphasis added)

This continuing failure to act will be good news to a handful of attorneys and accountants who, if the rule is finalized in its current form, will be busy making money by helping farm partnerships affected by the high payment limit reorganize as family entities so they can continue to benefit without limit.

To its credit, the proposed rule does take a stab at tightening the farm management definition, requiring recordkeeping, and adding a quantifiable test.  The absence of any real management test is a key to mega farms doing an end run around payment limits.  This step in the right direction, however, is negated by the failure to apply the new test to anyone but a small slice of all farms.

Large farms with unrelated partners would be able, under the proposed rule, to get up to $1 million a year in subsidy payments. If that is not enough, or if they cannot qualify under the new tightened management definition, they would be free to reorganize their businesses to continue to reap the same multiple payments they receive now.  Decades of waste and abuse will continue unabated.  Despite valiant attempts at key aspects of reform, the bottom line on the proposed rule is that it is fatally flawed and will result in very little change to the status quo.

It is time to put an end to the fun and games that keep payment limits from being effective at taxpayer expense and to the detriment of family farm agriculture.  We will continue to encourage that reform be comprehensive and across the board, applying to all farms, as Congress intended when it put the actively engaged in farming rule into law in 1987.  We agree with Candidate Obama, it is high time to close the loopholes, an opportunity that still remains before this proposal is finalized.

The National Sustainable Agriculture Coalition has posted additional information and analysis of the proposed rule on its blog: http://sustainableagriculture.net/blog/actively-engaged-proposed-rule/

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The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities.

 

 


Categories: Press Releases


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