Sen. Grassley to propose cap on farm subsidies

U.S. Sen. Chuck Grassley is once again looking to close what he believes are loopholes that have allowed a small portion of farm operations to exploit farm payments.

The Grassley proposal, which he plans to introduce later this week under the name “The Rural American Preservation Act,” would place a $125,000 cap on farm payments for individuals and a $250,000 cap for married couples. He told reporters Tuesday that it is similar to proposals he’s made in the past and something in which he continues to strongly believe.

The bill, he said, would lower caps on direct payments to $20,000 (currently $40,000) and on counter-cyclical payments to $30,000 (currently $65,000). Under current law this is no effective cap on what one farmer can receive from the farm program, but Grassley’s proposal would set a $75,000 limit per farmer from loan deficiency and marketing loan gains.

“Under current law, a relatively small number of large farming operations take home a disproportionate chunk of money paid out of the farm program,” Grassley said. “I have argued for years that this system does not channel the dollars to small- and medium-sized farmers who need it the most and [who are] the very basis of our farm safety net program.”

Roughly three or four years ago, the Republican noted, 10 percent of the nation’s largest farming operations were given between two-thirds and 70 percent of all farm program funds.

“Farm payments, as I have indicated, are intended to help farmers get through rough patches that are out of their control — and obviously that much more difficult for smaller- and medium-sized farmers than it is for that 10 percent,” he said.

“But throughout the years, some people have exploited loopholes in the law. So, in addition, I’ve included a provision in this bill to set a measurable standard by which the [U.S. Department of Agriculture] can determine if someone is truly engaged in farming. If someone doesn’t meet that standard, they won’t be eligible for farm program payments.”

Grassley said the government should not be in the business of “subsidizing big farmers getting bigger and driving up the costs of farm land and cash rents so that younger, beginning farmers can’t get started.”

Grassley notes that the current climate of budget cuts in Washington, D.C. may help his bill, but quickly added that he would have made this proposal regardless of the current budget situation.