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Why is administration taking it out on farm corporations?

If you follow the national media, you’ve seen the reports on how the current administration has been one of the most business-friendly in decades.

No matter which side of the political fence you’re on, you can’t help but be struck by how this White House comes to the aid of Corporate America through regulatory policies or by looking the other way on certain issues.

So what’s the deal with this administration and corporate agriculture? Why do officials seem determined to use payment limits to wipe out some of the nation’s largest farming operations?

As Congress returned from recess Sept. 4, Sen. Tom Harkin, chairman of the Senate Committee on Agriculture, Forestry and Nutrition, was circulating a draft farm bill that he hoped to use as the chairman’s mark when the committee began deliberations on Sept. 17.

The draft bill was said to include a payment limit of $250,000 per individual and a $500,000 adjusted gross income ceiling for persons who don’t earn at least 75 percent of their income from farming.

The proposal, which resembles legislation proposed by fellow Iowan Charles Grassley and North Dakota’s Byron Dorgan, has run into stiff opposition from Sens. Saxby Chambliss, the committee’s ranking member, Thad Cochran, R-Miss., and Blanche Lincoln, D-Ark.

But it has strong support from administration officials, especially Agriculture Secretary Mike Johanns who has raised the issue in speeches in Washington, Nashville and Decatur, Ill.

Harkin’s proposal would not go as far as the administration’s, which would reduce the AGI limit to $200,000, ending subsidies for those Johanns describes as the “wealthiest 2 percent of American tax filers.”

Johanns claims the lower AGI would save $1 billion, which could be invested back into farm programs. (The House farm bill puts the AGI limit at $1 million if 75 percent of your income is from farming.)

In Nashville, Johanns came down hard on payments to millionaires who live in New York or Washington. USDA says only 71,800 of the 2 million taxpayers who submitted a Schedule F with their 2003 tax returns reported adjusted gross income over $200,000. Johanns has said only 38,000 people would actually be affected.

Obviously some of those may be wealthy investors who live on New York’s Park Avenue, but many are also family farmers who have expanded their operations to achieve economies of scale needed to keep them in business. Some are incorporated for tax or liability purposes, but they’re still family farmers.

How many of those would be decimated if the government ripped the safety net out from under them is difficult to say, but some economists believe the number exceeds the 38,000 quoted by Johanns.

If Johanns truly believes in helping family farmers, he and the Senate ag committee need to figure out a way to end the payments to those investors without wiping out real farmers. After all, if they’re also corporations, what’s not to like if you’re a member of the current administration?


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