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Dear Readers,
Annette Higby from Sustainable ag network asked me to share
this corrected information with you regarding subsidy payments for large
farms. This information is just to share, you are free to comment how you
like and if you wish. There is a note that today is the last day for
comments.
The sample comment letter regarding the payment limitations/actively
engaged action alert posted to our website last week included a corrupted
email address for Dan McGlynn. The correct email address is: [log in to unmask]">[log in to unmask]
We've also had reports of emails bouncing even when using the correct
address. If you have problems submitting your comment there are two
different options for getting your message to USDA:
Send Dan McGlynn a letter by fax to 202-690-2130, or
Go to http://www.regulations.gov/
Select the small box for "find documents accepting comments and
submissions." Type "farm program payment limitation" in
the search box and then click "Go". The first document
listed will be the proposed interim rule on farm program payment
limitations titled "Farm Program Payment Limitation and Payment Eligibility
for 2009 and Subsequent Crop, Program, or Fiscal Years." Choose,
"Send a comment or submission." Then follow the directions on
the comment submission form and submit your comment.
This is the LAST DAY to submit your comments. Help
us send a loud and clear message that we want the worst farm subsidy loophole
on the books closed!
Thank you for taking action on this important issue!
Talking Points:
Here are some points to pick and choose from and put in your own words in
your email or letter to USDA:
- The biggest of all payment limitation
loopholes allows large farms to find multiple “partners” to fulfill the
“actively engaged in farming” requirement by providing only minimal
personal management and zero personal labor. In some cases,
participating in just two conference calls a year has been enough to
pass the actively engaged in farming test. This management
loophole must be closed or mega-farms will continue to collect huge
multimillion dollar annual payments, funneling payments through passive
investors, non-farm businesses, and sham “paper” farms. Those
ill-gotten excess subsidies are used to outbid smaller farmers and
beginning farmers for land, leading to land concentration and the slow
demise of family farming. This loophole is strangling the economic
future of rural communities and choking off economic opportunity and
farm entry for the next generation of farmers.
- When a person tries to qualify for
farm payments by providing only active personal management and no
personal labor, the rules should require the person to provide at least
half of the total management required to run the farm or at least half
of the total management that would be necessary to conduct a farming
operation commensurate in size with his/her requisite share of the
operation. This is the key point that must be addressed in
developing the new rule.
- The “actively engaged in farming” rules do
not apply to landlords, so tightening it will not interfere with crop
share leases. Widows and heirs who rent their land through crop
share leases will not be affected by tightening the rules. But
tightening the rules will prevent mega farms from collecting unlimited
farm payments.
- Closing the “actively engaged in farming”
management loophole will strengthen family farms and rural communities,
save federal resources, and help restore integrity to a program which is
sadly still rife with abuse.
- Both Republican and Democratic
Administrations have for decades either added regulatory loopholes or at
best looked the other way and allowed the abuse to continue. This
Administration, which campaigned on commodity program payment reform,
needs to end business as usual, clean up the system, and restore good
government. Enacting a quantifiable test for farm management is
the place to start because it is the granddaddy of all loopholes.
Background: In the 2008 Farm Bill, Congress
directed USDA to rewrite the regulations used to determine whether a person
is “actively engaged” in farming and thus eligible for payments. The
Bush Administration issued an interim rule right before leaving office that
takes a few small steps forward, but leaves the big loophole wide open, thus
ensuring the continuation of unlimited payments to mega-farms.
Rather than continuing to nibble around the edges of the problem, the
Obama Administration needs to go right to the heart of the matter, close the
loophole, and stop wasting taxpayer’s money in an annual bailout scheme that
puts the mid-sized family farm at an unfair competitive disadvantage with
mega farms.
Under current rules, to be eligible for payments under the labor test one
must provide 1,000 hours of labor a year or half of one’s requisite share of
the total labor to operate the farm, but to be eligible for payments under
the alternative management test, anything goes -- there is no quantifiable
standard. Congress’ own Government Accountability Office found that
mega farms have been funneling payments through people who are not farmers,
who do not live anywhere near the farm, and who participate in a couple
conference calls a year, calling these people “farm managers” each of whom
then becomes eligible for a full payment.
Those “two conference call a year” people are among the simpler schemes
used to evade the law. There are more complex ones as well. For
example, the Government Accountability Office provides this illustrative
example:
A general partnership that farms more than 50,000 acres was divided into
more than 30 non-farming entity corporations which together collected over $5
million in annual farm payments in 2001 However, the partnership
reported a net loss in 2001 due to its transactions with those non-farming
entities, including a land leasing company, equipment and petroleum
dealerships and crop processing companies. These non-farming entities
charged above-market prices for goods and services, including excessive
charges for storage and processing, and paid below-market prices for the
harvest. All the non-farm entities had ownership linked to one
individual. This served to take payments from many different
"farms" and concentrate them into profits for a single
person.
These schemes to rip off the taxpayer and put family farmers out of
business are an outrage, and it is time to put a stop to it! Please
write to USDA today and say enough is enough! Tell them to fix the rule
now by adding a real, quantifiable management test and then actively enforce
the law against those who try to continue to bilk the program.
Thanks for your action to
support family farms!
National Sustainable Agriculture Coalition
110 Maryland Avenue NE Washington, D.C. 20002
Phone: (202) 547-5754 Fax: (202) 547-1837
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