via a special arrangement with Informa Economics, Inc.
Senate to follow but search is on for an
alternative budget offset
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House on Wednesday cleared a bill (HR 6849) by voice vote that would suspend
for two years language that farmers with 10 base acres or less be ineligible
for farm program payments. The measure was prompted by concerns that USDA's
interpretation of the provision is excluding some small farming operations
from receiving subsidies.
The bill also would extend the registration deadline from Sept.
30 to Nov. 14 or 45 days after enactment, to give more time
to smaller producers who had been discouraged from enrolling.
A companion Senate bill (S 3538) is pending and is
widely expected to pass but at this juncture, the Senate bill currently
has no budget offset.
The House bill suspends, for 2008 and
2009 crops, a provision barring subsidies to farmers who do not have at
least 10 eligible base acres on a farm – the matter
will be revisited next year and House Ag Committee Chairman Collin Peterson
(D-Minn.) said the new language on this matter would detail the farm law's
original intent to permit farmers who aggregate their land to continue
receive farm program payments.
USDA continues to say the 2008 Farm Bill does not allow farmers
to combine tracts to meet the threshold. However, farm bill
writers said the provision was intended to allow farmers to aggregate
multiple plots of land to meet the 10-acre minimum. A managers’
statement accompanying the 2008 Farm Bill detailed that intent –
the threshold was designed to stop money from going to non-producers
who live on small plots of land.
Around 255,000 farms have 10 acres or less in "bases"
eligible for farm program payments – the farm bill exempts
socially disadvantaged and limited-resource farmers from the 10-acre
"The intent of that original provision was to stop gardeners
in New York City from getting program payments. It was never intended
to prevent bona fide farmers from participating in commodity programs,"
House Agriculture Committee Ranking Member Bob Goodlatte (R-Va.) said
during floor debate. "It is unfortunate that we are forced to pass
further legislation to make sure this intent cannot be misconstrued."
The 2008 Farm Bill prohibits direct, counter-cyclical, or Average
Crop Revenue Election (ACRE) payments to producers of 2008-2012
crops if the sum of base acres on the farm is 10 acres or less,
unless the farm is owned by a socially disadvantaged or limited
resource farmer or rancher, as determined by the Secretary of
(The Farm Act defines “socially disadvantaged or limited
resource” farmers or ranchers as those who have
suffered certain kinds of discrimination.)
Each farm’s base acres are an average of the number of
acres planted in each crop (feed grains, oilseeds, wheat, rice,
cotton, and pulse crops) over a specified historical period. A
farm’s base acres do not increase or decrease over time.
According to USDA, about 255,000 farms in 2006 with total crop
base of 10 acres or less received about $23 million in payments.
Information from USDA also indicates that about one-third of those
payments were made to farms owned by socially disadvantaged or
limited resource farmers or ranchers.
The Congressional Budget Office (CBO) estimates that suspending
the prohibition on payments to such producers would increase direct
spending by a total of $11 million for the 2008 crops and $9 million
for the 2009 crops, for a total of $20 million over the 2009-2018
Budget offset still an issue.
In the House-passed bill, the $20 million cost of suspending the 10-acre
rule would be offset by cutting computer outlays for USDA's Risk Management
Agency (via the Federal Crop Insurance Corporation) for upgrades to its
computer systems, but USDA Deputy Secretary Chuck Conner said the cut
could slow the delivery of crop insurance benefits.
"The lack of (infrastructure technology) will greatly
impact not only the speed of delivery of crop insurance benefits but
the quality of those benefits in terms of our tracking ... ability,"
Conner said. Cutting funding makes it harder "to ensure
that we're making payments to the producers who have actually had a
loss in that situation," he said. Conner called the move "a
very bad idea" because the funding was needed to upgrade computer
infrastructure used for crop insurance programs that are in "dire
But Rep. Peterson said the proposal “should have no
impact on crop insurance delivery. If USDA had followed Congressional
intent on this issue, we wouldn't have to reduce spending on other Administration
priorities to fix their mistake."
The Senate is searching for an alternative budget offset
– if one can be found. Rep. Jerry Moran (R-Kan.) said during House
consideration that he opposed the offset and would work to remedy it.
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retransmission is prohibited under U.S. copyright laws.