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Hearing held on 2008 farm law’s Title I, AGI compliance

The House Agriculture Committee's Subcommittee on General Farm Commodities and Risk Management conducted a hearing to review programs authorized by Title I of the 2008 farm law and the SURE program.

The House Agriculture Committee's Subcommittee on General Farm Commodities and Risk Management, chaired by Rep. Conaway, R-Texas, conducted a hearing to review programs authorized by Title I of the 2008 farm law and the Supplemental Revenue Assistance Payments (SURE) program.

Title I authorizes direct payments (DPs), counter-cyclical payment (CCP) programs and marketing assistance loans. The 2008 farm law also initiated a new form of revenue support known as Average Crop Revenue Election (ACRE). A permanent disaster program known as SURE also was introduced in the 2008 farm law.

"In the last few years American agriculture has experienced a multitude of perils, both natural and man-made,” Chairman Conaway, R-Texas, said. “With that in mind, and Congress lacking the ability to accurately predict the future, it is imperative that future farm policy not only mitigates a crisis, but also establishes a framework to prevent one. With little time before the next farm bill, we should be cognizant that our resources are finite, our decisions are timely, and our investments need to last. Our choices must be wise."

The primary witness was Bruce Nelson, who was recently appointed to serve as Farm Service Agency (FSA) administrator. He was accompanied by Juan Garcia, FSA’s acting deputy administrator for Farm Programs who most recently served as state executive director in Texas.

Written testimony provided to the Committee is at

There was excellent attendance by subcommittee members. As expected, members asked numerous questions about the impact of eliminating Direct Payments, about how to improve SURE and about which programs USDA representatives considered to be a top priority.

Nelson did not respond directly to the latter question but he did reveal that USDA has analysis which might guide members in future deliberations.

Garcia responded to numerous questions about the IRS review of Adjusted Gross Income (AGI) compliance. He also announced that beginning with signup for the 2012 crop programs the agency will eliminate the separate document growers currently are required to send to the IRS granting the agency permission to share information with USDA. That document will be incorporated into the USDA signup process. Garcia did not respond directly to a question by the Chairman asking how many growers have been flagged by the IRS review.

Several members asked about FSA’s ability to deliver programs, and Nelson advised that a number of FSA employees have accepted early retirement offered in anticipation of the agency experiencing significant budget cuts in FY12.

Garcia briefly described a project that will allow growers to file applications and supply acreage data once -- either at an FSA office or to a crop insurance agent. The information will be entered into a record which is secured and can be used by FSA and the Risk Management Agency eliminating the need for growers to provide the same data multiple times. A pilot program is scheduled to be conducted in Kansas this fall.

Rep. Scott, D-Ga., stated that he is concerned by the one-size fits all approach to AGI tests. He said the financial community is going to be unwilling to lend funds to individuals with AGI’s that can’t service the level of debt necessary to purchase and maintain new equipment and finance operations. He specifically referenced the cost of new cotton pickers which can range from $600,000-$750,000 as an example of the financial resources required to operate a modern farming operation and concluded by saying “a $250,000 limit on AGI is simply unworkable in these times.”

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