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Amendment would reduce payment limits

As farmers anxiously await Senate action on a new farm bill, new amendments with the potential to have a substantial economic impact on Mid-South farmers wait in the wings.

First and foremost is a proposal Sen. Charles Grassley, R-Iowa, is expected to offer. Grassley's amendment would place a strict limit of $225,000 per farmer on all farm program payments and eliminate marketing certificates for cotton.

Grassley intended to offer the payment limit proposal as part of a comprehensive amendment to the Senate farm bill's commodity title prior to the Christmas recess. But the amendment was pushed aside in the maneuvering to invoke cloture and force an up or down vote on the farm bill before the holidays.

“We don't want 10 percent of the farmers getting 60 percent of the farm bill,” Grassley told a group of about 30 farmers in his home state shortly before he and the rest of the Senate returned to Washington from their holiday recess.

He was expected to offer the amendment as soon as the Senate got down to work trying to resolve the heated issues that stalled action on the bill in mid-December.

Senate Majority Leader Tom Daschle, D-S.D., said he hoped the farm bill would be one of the first measures the Senate takes up and completes within the first few days of its return on Jan. 23.

“Because of the schedule, we only have two days this week and two days next week to work on this legislation,” he said, speaking during the Senate's opening session. “This is an ambitious agenda, but I know we can do it if we work hard and make each day count.

“Passing a farm bill and moving it to conference and then to the president's desk is critically important. I noted the other day that USDA said that without a new farm bill this year or some form of emergency assistance, farm income could be down by 20 percent this year.”

According to Washington sources, the Grassley proposal would cap fixed, decoupled and target price deficiency payments at $75,000 and marketing loan gains and loan deficiency payments at $150,000 per farmer. It would provide an additional $50,000 limit for husbands and wives when both qualify for payments.

The proposal contrasts with an estimated $500,000 payment limit in the Daschle-Harkin bill passed by the Senate Agriculture Committee in November and the House bill that was passed Oct. 5.

In a section of the proposal entitled “Direct Attribution of Payments,” Grassley says, “Limitations will be tracked through individuals, entities, partnerships, etc. directly to individuals. While producers may continue to participate in operations that exist today, direct attribution eliminates the interest in participating in multiple entities.”

The proposal also says that any grower whose adjusted gross income for the previous three years exceeds $2.5 million or who received less than 75 percent of his adjusted gross income from farming will not be eligible for a payment.

In one section, the proposal says that gains received from the use of commodity certificates would be counted against the payment limitation. But it also says that generic (commodity) certificates “will have little value because loans issued beyond loan gain limitations will essentially become resource loans.”

USDA's Office of Inspector General would be conducting in-depth reviews in five counties in six states on a yearly basis to insure enforcement of the rules.

While Grassley's proposal is receiving most of the attention, several other Midwest senators have indicated they plan to introduce or support amendments tightening limitations.

Sens. Tim Johnson, D-S.D., Byron Dorgan, D-N.D., and Don Nickles, R-Okla., have spoken in favor of tightening limitations. Johnson reportedly had planned to introduce an amendment before the Christmas recess. Daschle and Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, have also spoken about targeting benefits to smaller farmers.

In his comments to the growers in Missouri Valley, Iowa, in mid-January, Grassley accused Democrats of failing to address the payment limits issue because they needed the support of senators in Southern states. “Now, I'm going to give them a chance to put their vote where their mouths have been for the past few years,” he said.

Besides Grassley and Johnson, other senators have indicated they plan to offer amendments. Those will likely include the Cochran-Roberts amendment (named for Republican senators Thad Cochran of Mississippi and Pat Roberts of Kansas), which was offered but failed to secure enough votes prior to the Christmas recess.

The White House has endorsed Cochran-Roberts, giving its authors a stronger hand when the Senate resumes debate on the farm bill.

Sen. Richard Lugar, R-Ind., who recently blasted the Daschle-Harkin bill on the pages of the New York Times, is also expected to re-introduce his income insurance proposal. The Lugar bill was defeated 30-70 before the Senate recessed.

Farm organizations, meanwhile, began stepping up their efforts to remind the Senate of the need for quick action on the farm bill.

In a letter to Daschle and Senate Minority Leader Trent Lott of Mississippi, American Soybean Association leaders noted that soybean prices are at 30-year historic lows and the outlook for improvement is not good.

“Early enactment of a new farm bill effective for 2002 crops will end producer uncertainties about planting and avoid another year of ad hoc economic loss assistance,” said Bart Ruth, ASA president, Rising City, Neb..

Ruth noted that ASA has repeatedly urged the Bush administration to keep the soybean loan rate for 2002 at $5.26 per bushel to prevent more economic loss for soybean producers. USDA decided, instead, to delay announcing the new loan rate until after the new farm bill is passed.

“The only way to end the uncertainty over this year's safety net for producers of soybeans and other crops is for Congress to complete a bill as expeditiously as possible that is effective for the 2002 crops,” said Ruth.

e-mail: [email protected].

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