NSAC's Blog

Grassley-Feingold Re-Introduce Commodity Cap Bill

August 4, 2010

On Wednesday, August 4, Senators Chuck Grassley (R-IA) and Russ Feingold (D-WI) introduced legislation to reduce farm program payment limits and close the loopholes that are being used by mega farms to game the system and soak the taxpayer.

The Rural America Preservation Act (bill number not yet assigned) would cap commodity payments at not greater than $250,000 a year for any one farm.  It would reduce the annual cap on direct payments from $80,000 to $40,000 per farm and the annual cap on counter-cyclical payments from $130,000 to $60,000 per farm.  ACRE payments would be scaled back by comparable amounts.  Marketing loan gains and loan deficiency payments would be capped at $150,000 per farm per year.

Under current law there is no limit at all on marketing loan gains and loan deficiency payments and no effective limit on direct and counter cyclical payments or an the ACRE payment option.

The new bill proposes to close a variety of loopholes that allow mega farms to collect far higher payments than current law would otherwise seem to allow.  One of the major ones would force USDA to adopt a measurable standard to determine whether recipients are actively engaged in farming.

The 2008 Farm Bill provided USDA with the opportunity to adopt just such a measurable standard, but the Obama Adminstration made the political decision last January in issuing the final rule to keep the current loophole locked in place and thus to continue providing high six and seven figure annual payments to the nation’s largest farming operations.

The new bill is patterned very closely on previous versions of the same bill offered by Grassley with Senator Byron Dorgan (D-ND) as the principal Democrat on the bill.  Dorgan is retiring from Congress this year, opening the door to Feingold moving up to become the lead Democrat on the measure in its latest iteration.

The Dorgan-Grassley bill won majority votes on the Senate floor in each of the past two farm bill debates, but did not in either instance become part of the final farm bill adopted into law.

NSAC and NSAC member groups have worked very closely with the bill’s champions on the development and advocacy of this bill over many years.  We continue to urge its adoption.

In introducing the bill, Senator Grassley noted, “The farm program was never intended to help big farmers get bigger, instead it was created to help those who couldn’t withstand the political whims of Washington or the fierce reckonings of Mother Nature.”

Added Senator Feingold, “For too long large agribusinesses and non-farmers have gamed the limits on farm subsidy programs, taking limited and critical resources better used to support our family farmers that are facing numerous challenges in the current economic climate…Our legislation is a common sense, bipartisan approach to support… family farms, while saving taxpayer dollars.”

Categories: Farm Bill

One response to “Grassley-Feingold Re-Introduce Commodity Cap Bill”

  1. […] Sens. Byron Dorgan (D-N.D.) and Russ Feingold (D-Wis.). Grassley’s proposal would put a hard cap on payments to an individual, with the maximum farm payment being $250,000. This makes land speculation much less profitable. […]