Largest farms benefit from new Congress mandate
November 19, 2020
Who deserves farm payments? Farm payments should be reserved for family farms facing difficult times, but the government and taxpayers should not support checks without limit to the largest operations.
While enacting limits on farm payments, Congress and the U.S. Department of Agriculture have failed to close loopholes that enable the largest farms to maneuver around them.
Most farm payment programs are subject to a maximum payment, and generally farms with an adjusted gross income of more than $900,000 are ineligible.
But, under USDA rules, many farms can claim multiple maximum payments for several individual family members involved in the operation.
Congress loosened restrictions in several ways in the 2018 farm bill, and the USDA recently released a rule codifying these changes.
The Center opposes these changes and urges Congress to act to rectify them.
One change expands the number of family members who can claim farm payments. Previously, direct family members, such as parents, children and spouses involved in the operation could each claim a payment. Now, nephews, nieces, and cousins can claim payments. While most family farms don’t pursue payments for multiple family members, the few who do can now bring in millions of taxpayer dollars.
Another change is the removal of the payment limitation of $125,000 from Marketing Assistance Loans. Farmers can use excess commodity on hand as collateral to receive these types of loans when prices are low. And, when prices increase, they sell and pay off the loan.
The farm bill removed similar payment caps from other farm payment programs, such as Loan Deficiency Payments and Marketing Loan Gains. Other support programs lost their payment caps as well.