In contrast to the looser limits on farm subsidies approved by the House in its farm bill, the Senate will clamp down on payments to so-called managers who live in town and exercise little control over farm operations, announced the leaders of the Agriculture Committee on Wednesday. The decision resolved one of the major issues for Senate debate; still remaining was a proposal to make the wealthiest farmers pay more for federally subsidized crop insurance.
Farm-state lawmakers say that considering the four-year slump in farm income and the risk of damaging trade disputes this summer, it is vital to enact the new farm bill before the 2014 farm law expires on Sept. 30. “Predictability and certainty” are paramount, said Senate Agriculture chairman Pat Roberts.
Progress on the Senate bill was slowed, however, by a skirmish ignited by Tennessee Sen. Bob Corker over reining in President Trump’s power to impose tariffs in the name of national security and by Florida Sen. Marco Rubio’s effort to limit trade-promotion spending in Cuba. To make his point, Rubio blocked a vote on amendments.
The House passed its polarizing farm bill last week, 213-211, on its second attempt. After the Senate passes its version, the next step will be negotiations to reconcile differences between the House and Senate bills. SNAP is the most contentious issue, but farm subsidy limits could rank as second. The House would broaden and toughen work requirements for food stamp recipients.
With payment limits settled, the lightning rod question for Senate debate was expected to be Sen. Richard Durbin’s amendment to make the richest 1 percent of farmers pay more for crop insurance. The government now pays 62 cents of each $1 in premiums. Durbin would reduce the premium subsidy by 15 percentage points for operators with more than $700,000 in adjusted gross income. Senators approved a similar amendment in 2013, but it was deleted during House-Senate negotiations over the 2014 farm law.
As part of updating the farm bill, Roberts and Debbie Stabenow, the senior Democrat on the Agriculture Committee, incorporated language from Iowa Sen. Chuck Grassley that says only one person per farm can claim crop subsidies as a manager. The amendment also says a manager must perform at least 25 percent of the “total management hours” required yearly for a farming operation, or an annual minimum of 500 hours, roughly equivalent to 15 weeks of full-time employment.
Grassley is a longtime advocate of focusing farm payments on family-size operations. “I can’t defend farm subsidies going to Wall Street or people who live in beach houses,” he told reporters earlier this week.
It would be counterproductive to have a floor debate on subsidy limits, said Roberts. “That stirs up a lot of dust, especially in some regions of the country. … It’s thorny.” So committee leaders added the Grassley amendment to the farm bill.
“GOOD NEWS it looks like we’re on our way to the Senate adopting my amendment on payment limits in the Farm Bill so only REAL family farmers will receive them. SO MUCH COMMON SENSE that Chair Roberts/RM Stabenow are including my amendment in the cmte bill,” Grassley tweeted happily.
At the moment, there is no effective limit on the number of managers a farm can claim. A month ago, the Government Accountability Office reported that a corn, soybean, and cotton operation had collected $3.7 million in subsidies in 2015 despite the nominal $125,000-per-person limit on payments. The operation had an interlocking network of two individuals and 32 corporations. Its 34 members included 25 people and 10 spouses who, it said, provided farm management.
The House farm bill would make cousins, nephews, and nieces eligible for farm subsidies and remove the payment limit on some types of corporate farms. Roberts responded, “To be determined” when asked if he will advocate for the Grassley limits during House and Senate negotiations. There are wide differences between the bills, he said. “We’re going to go step by step by step very carefully, and don’t step on any land mines and blow up anything.”
The iterations of the Senate Farm bill, including the current version, are available here.