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Obama Administration Caves on Agriculture Reform

January 6, 2010

With the arrival of a new year, NSAC is transitioning its Weekly Update into a blog with regular postings about sustainable agriculture and food policy and politics.  We will continue to provide the information normally included in the Weekly Update about Congress, the U.S. Department of Agriculture, and other goings-on in the sustainable agriculture and food policy world, but we will also include more analysis, stories, and general musings about the crazy realm of federal agriculture policy.  We, of course, welcome comments and discussion.  The Weekly Update will continue, but as a digest of weekly blog posts.


After nearly a full year of a two-faced agenda for agriculture — on the one hand, support for the development of local, regional, and sustainable and organic food systems and on the other, support for a big-ag, biotech export-oriented agriculture — the Obama Administration delivered its verdict today on farm subsidy reform:  megafarms win and family farmers lose.

In tomorrow’s Federal Register, USDA will publish final regulations concerning the limits on farm subsidy payments and the “actively engaged in farming” rules that determine who is eligible for subsidies.  The final rule is available on the Public Inspection List today.

The verdict betrays President Obama’s number-one agriculture campaign pledge and keeps intact the farm subsidy loopholes that allow mega farms to get around the limits established by the 2008 Farm Bill by subdividing their operations into multiple paper corporations.  The existence of this loophole has allowed hundreds of thousands and even millions of taxpayer dollars to go to single farming operations, underwriting the growth in farm size, the demise of mid-scale family farms, and the subsequent decline of rural communities, while driving up land values that make it difficult for a new generation of farmers to buy land.

One of the strongest steps that the Obama Administration could have taken to reform agriculture and farm subsidies would have been to make good on the campaign promise and close the “active management” loophole.  Both the U.S. Government Accountability Office (GAO) and the USDA Commission on the Application of Payment Limitations for Agriculture named the “actively engaged in farming” rules and more specifically the “active management” loophole as a key feature of current policy that leads to frequent abuse and weakens the integrity of the programs.  In addition, GAO identified and illustrated associated schemes and devices used by unscrupulous subsidy beneficiaries to channel government payments through non-farming entities back to themselves.  All of this is left intact by the new final rule.

Additionally, a full 73% of the over 5,000 public comments received on the rule specifically recommended that the active personal management loophole be closed, in keeping with the Obama campaign pledge.  A significant portion of the remainder of the public comments were also pro-reform without mentioning the specific remedy.

A fulfillment of the campaign promise and a solid step forward on agriculture reform would have been to “limit payments to active farmers who work the land, plus landlords who rent to active farmers” — a statement taken directly from Obama’s campaign platform.  Instead, the Administration has decided to continue to allow large landowners to reap otherwise illegally large six and seven figure annual payments by creating “paper farms” and ficticious farmers through which to funnel additional payments.  By another name it is government-sanctioned and taxpayer-financed fraud.

As Obama’s USDA settles in and is forced to choose between taking concrete steps to advance a more sustainable agricultural system or the destructive status quo — between loving one son and the other — it’s becoming clearer that it loves the destructive son best.

Categories: Competition & Anti-trust

5 responses to “Obama Administration Caves on Agriculture Reform”

  1. Alan Roebke says:

    Yes, traditional payment limits still need addressing but since 2006 Crop Insurance subsidies have become the supper “PERK” that big farms treasure and pocket. For you see these subsidies have no limit at all.

    For over the last 3 years, most farms in Minnesota and the Midwest, “Crop Insurance Subsidies” have been a far bigger perk than traditional farm subsidies. One 10,000 acre farm in ND received $550,000 in sudsidies to insure profits on it’s operation. A California farm received $750,000 in premium subsidy with many farms topping $150,000 in insurance subsidies in both Minnesota and the Dakota’s but the issue is not covered by the regions press! Say Alan Roebke (REB-key) of http://www.congressionalchange.com

    Please listen to Crop Insurance ad running in western Minnesota–Ag Chairman Collin Peterson District: TP Alan Roebke (REB-key)

    This week the ad is running in Roseau, Crookston, TRF, Bemidji and Fargo.


    The Top Fifteen States That Received at Least $100 Million in Taxpayer Subsidies for the

    2008 and 2009 Crop to Reduce the Farmers Crop Insurance Premium by about 60%!

    Compared to the Taxpayers Cost on the 2006 Crop that shows the Runaway cost

    without Proper Congressional or Presidential Administration, in a time of good Farm

    Prices and Good Farm yields. Which shows lack of Government oversite!


  2. […] of what it means to be “actively engaged” in farming and was something that Obama had promised to fix during his campaign, even to the point of making it part of his Rural Agenda. What happened? Well, […]

  3. Kay says:

    NICE ARTICLE! But, can you-all clean up the above comment? It takes away from the commenting section and I think this one could generate quite a few…

  4. […] conventional wisdom in anti-CAFO circles holds that Obama’s record — as opposed to his soaring rhetoric […]