Iowa Sen. Charles Grassley is blunt about how farm-subsidy reform was watered down in the 2014 farm law. “We were snookered,” he says, by the four lawmakers who negotiated the final version of the law. In place of language of allowing only one person to collect subsidies for providing farm management, the law instructed the USDA to define “significant contribution of active personal management” and exempted family farms from the regulation. The exclusion covers an estimated 96 percent of the nearly 2.1 million farms in the country.
Grassley told reporters that he was filing a two-page bill to “eliminate the loophole that was intentionally included in the farm bill.” If adopted, it would take effect with 2017 crops. The farm safety net should be available only to actual farmers, people “with dirt under their fingernails,” said the Iowa Republican, not city-dwellers who never set foot on the farm or take no role on it.
For now, only general partnerships and joint ventures are covered by the rules that the USDA issued in 2015. They allow no more than three people to claim eligibility for crop subsidies for farm management, depending on the size of the farm. The Government Accountability Office says there have been abuses of the farm-management designation, including operations where many family members are listed as managers and operations with managers who live “significant distances” away.
“Unless there’s a budget item — a real push to save money — we won’t have an opportunity to bring this up,” said Grassley when asked about the chances for enactment. “If there is an opportunity, I’m going to use it.”
A budget bill is the best chance, he said, because farm groups and their allies in Congress are united against altering the 2014 farm law on the fly, and a new farm bill won’t be written until 2018.
The outlook is slim for so-called budget reconciliation — mandatory cuts in federal programs — given election-year tensions in Washington. Congress might not agree on a budget blueprint this year; conservative House Republicans are threatening to vote against the austere budget plan written by party leaders.
During work on the 2014 farm law, the House and Senate voted for versions that included a Grassley proposal to allow only one person to claim a subsidy payment as a manager. The language was rewritten during House-Senate negotiations, calling on the USDA to look at tighter rules for non-family farms.
Eligibility rules, known as “actively engaged in farming,” are as controversial as attempts to cap annual payments. To qualify for a payment, people must satisfy two criteria: they must provide land, capital or equipment, and they must perform active labor or management. The rules written by USDA under the 2014 farm law restrict farms to one manager with exemptions, up to a total of three mangers, for farms with complex operations. Managers have to keep records showing they performed at least 500 hours or 25 percent of management to show they qualify as the second or third manager on a farm.
Allowing up to three managers on a farm plus someone on the land means the participants and their spouses can collect a total of $1 million, said Ferd Hoefner of the National Sustainable Agriculture Coalition. “That’s a huge limit.”