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Payment limitation reform, as proposed in the Senate version of the Farm Bill, would do little in reforming the system, according to a new report released last week by the Center for Rural Affairs in Lyons.
The report found that 99 percent of farmers affected by the payment limitation "reform" in the Senate bill would continue receiving the same large payments by switching to other means to exceed the limits.
According to the report's author, Dan Owens, supporting family-scale farming has long been a goal of farm programs that has broad support among farmers and all Americans.
"However, the House- and Senate-passed farm bills fail to advance that goal," Owens said. "In reality, they continue to subsidize the destruction of family farming and the agricultural communities of rural Amer- ica."
The analysis found only five farmers in seven states who would face any cut in direct payments under the direct attribution provisions of the Senate bill, and none under the House bill.
However, the analysis found 73 large farms that would receive an increase in payments under the House version of the bill.
The report titled "False Reform: An analysis of Congressional payment limit provisions in the 2007 Farm Bill" examined data on individuals receiving more than $40,000 in direct payments, payments made every year regardless of crop prices, for the 2005 crop year in seven states (Georgia, Iowa, Kentucky, Minnesota, Montana, North Dakota and Oklahoma).
According to Owens, the CFRA's analysis reveals that eliminating the three-entity rule and instituting direct attribution of payments, as proposed by the House and Senate farm bills, would do little to reduce direct payments to the nation's largest farms.
He said the vast majority of farmers currently utilizing the three-entity rule to double the nominal payment limit would simply achieve the same result through the spouse rule which allows married farm couples to receive double the limit by receiving payments in the name of each spouse.
"Closing one gate while leaving two open won't keep the hogs out of the trough," said Owens.
The center analyzed the marital status of farmers currently using multiple legal entities to receive more than the current $40,000 paper limit on direct payments.
According to Owens, only 1 percent of farmers for whom marital status could be determined are unmarried and likely to face a payment reduction as a result of Senate bill provisions eliminating the three-entity rule and instituting direct attribution of payments.
Under the House version of the bill, he said, no farmers face a reduction and 73 would receive increased payments because direct attribution is offset by an increase in the paper payment limitation, from $40,000 to $60,000.
Owens said information gathered for the report, along with the analysis of IRS data and adjusted gross income limits recently released by Sen. Charles Grassley, R-Iowa, " demonstrates the complete ineffectiveness of the so-called 'reform' measures in the House and Senate-passed farm bills."
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