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Grassley et al offer new payment bill

The bill, S-667, was offered by Sens. Charles Grassley, R-Iowa; Chuck Hagel, R-Neb.; Byron Dorgan, D-N.D.; Tim Johnson, D-S.D.; and Minority Leader Tom Daschle, D-S.D. Grassley and Dorgan were co-authors of the payment limits amendment to the new farm bill passed by the Senate in 2002.

The latest bill would amend the 2002 farm bill to lower the limits on direct payments from $40,000 to $20,000 and counter-cyclical payments from $65,000 to $30,000. Its stated limit for marketing loan gains is $87,500, higher than the current $75,000. But the latter allows the use of generic commodity certificates.

The legislation reportedly retains the three-entity rule – subject to its new limits. If an individual participates in only a single farming operation and receives benefits through that operation only, the limits would be doubled, according to Senate sources.

Thus, the effective maximum limit on total program support and marketing loan gains would be $275,000 – the limit for a farmer and spouse in the Grassley-Dorgan amendment passed by the Senate, but omitted from the farm bill conference report last year.

If an individual and spouse jointly receive benefits, their total benefits are still limited to $275,000. Presumably, a spouse that qualifies separately, as under current law, would still be eligible to receive the maximum benefits, according to the Senate sources.

The bill’s language says that if a commodity is redeemed by certificates or is forfeited to the Commodity Credit Corp., the difference between the loan and the marketing loan repayment rate is included in the limitation on marketing loan gains and loan deficiency payments.

The legislation varies from the language reportedly outlined by Sen. Grassley in the payment limits amendment he successfully offered during Senate Budget Committee deliberations on the FY 2004 Joint Budget Resolution earlier this month.

The latter contained higher limits totaling $300,000 per person, but it would eliminate the three-entity rule and the use of commodity certificates.

Grassley’s amendment to the non-binding budget resolution would use the $1.398 billion in savings from tighter payment limits to restore funding to fellow Iowa Sen. Tom Harkin’s Conservation Security Program.

The proposed legislation also establishes new provisions limiting eligibility for benefits for individuals providing custom farming services or who participate in share-rent arrangements. The secretary of agriculture would be required to promulgate regulations necessary to implement the provisions of the new act.


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