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Lawmakers Zero In on USDA Implementation Re: Denying Payments to Farmers

Published on: 11:55AM Aug 12, 2008

By Jim Wiesemeyer

via a special arrangement with Informa Economics, Inc.

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Lawmakers irked at USDA reading of law

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


-- Quantifying the impact of no farm program payments for farms with 10 acres or fewer: A USDA analyst says that the 2008 Farm Bill language nixing any farm program payments for small operations would impact 255,000 farms nationwide, with a total of $24 million in direct payments.

Sens. Chuck Grassley (R-Iowa) and Tom Harkin (D-Iowa) are leading 23 of their Senate colleagues in an effort to ensure a provision in the farm bill is implemented to Congress’ intent. The letter comes after complaints about USDA's interpretation of a provision that would eliminate producers from receiving direct, counter-cyclical, or ACRE payments, if the farm is 10 acres or less. The manager’s report of the farm bill specifically included language to ensure that small farm acreages could be aggregated to allow for farm program payments if the sum of the acres is over 10.

“The Department of Agriculture can’t just make up its own rules when implementing a law that is clearly written,” Grassley said. “The Department needs to follow the law and implement it as Congress intended. USDA's actions punish small farmers. Iowa farmers won’t tolerate, and neither will I.”

“Congress acted and streamlined USDA’s process in administering payments to small farms,” said Harkin, Chairman of the Senate Ag Committee. “Now USDA is disallowing consolidation that simplifies its administrative task and instead is focused on a punitive policy approach. It does not make sense from a policy or practical perspective.”

The letter was co-signed by Senators Mike Crapo and Larry Craig of Idaho, Blanche Lincoln of Arkansas, Thad Cochran of Mississippi, Patrick Leahy of Vermont, Saxby Chambliss and Johnny Isakson of Georgia, Sherrod Brown and George Voinovich of Ohio, John Thune of South Dakota, Bob Casey and Arlen Specter of Pennsylvania, Ben Nelson of Nebraska, Max Baucus of Montana, Russ Feingold and Herb Kohl of Wisconsin, Norm Coleman of Minnesota, Kent Conrad of North Dakota, Pat Roberts of Kansas, Bob Corker of Tennessee, Debbie Stabenow of Michigan, Susan Collins of Maine, and Hillary Clinton of New York.

Here is the text of the letter:

Dear Secretary Schafer,

The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, June 18, 2008) includes a new provision regarding the treatment of farms with limited base acres. Section 1101(d)(1) prohibits direct payments, counter-cyclical payments, or average crop revenue election payments if the sum of the base acres of the farm is 10 acres or less. Section 1101(d)(2) provides exceptions for socially disadvantaged or limited resource farmers or ranchers.

On June 30 the Commodity Credit Corporation of the U.S. Department of Agriculture (USDA) published a notice in the Federal Register entitled, “2008 Direct and Counter-Cyclical Program.” A section of this Notice provides:

“Effective with the date of publication of this notice, to be assured that producers on farms with base acres of 10 acres or less are prohibited from receiving payments as provided in the 2008 Farm Bill, Farm Service Agency County Committees (COC) will not approve requests for farm combination reconstitutions of farms having base acres of 10 acres or less if the request was received after the date of enactment of the 2008 Farm Bill (May 22, 2008). However, as an exception to the above rule, a farm with a total of 10 base acres or less may combine with another farm if one of the farms undergoes a change in land ownership. To qualify for this exception the owners of each of the farms participating in the new combination must be identical and have identical shares in both farms.” 73 FR 36840

The policy set forth in this notice disregards the statutory language which applies the limitation to the “sum of the base acres of the farm.” This intent is clearly stated in the statement of Managers which provides:

“The Managers intend for the Department to allow for the aggregation of farms for purposes of determining the suspension of payments on farms with 10 base acres or less. The Managers expect for the Department to review farms in this category on an annual basis rather than prohibiting payments to these farms for the life of the farm bill.” House Report 110-627, May 13, 2008, page 675.

We are concerned by recent conversations with USDA personnel that they are relying (at least in part) on draft language considered during the conference process. Regardless of previous draft language that was considered by the conference committee, the intent of this provision was to prohibit payments only if the sum of all base acres on the farm is 10 acres or less. The conference committee intended to allow reconstitutions or aggregation of farms in determining eligibility. Draft language reviewed by the conference committee is not relevant to program implementation. Only the actual text of the bill passed by Congress and the managers’ language should be considered by USDA during rulemaking and implementation of the Act.

The statement of managers provides that aggregation of acres was intended. Thus, a farm with 10 or fewer base acres may be aggregated or combined with any farm or farms with an amount of base acres (whether owned or rented) so the total aggregated base acres on the resulting farm exceed 10 acres, making the resulting farm eligible for direct, counter-cyclical, and average crop revenue election payments.

The notice language that provides that a farm with a total of 10 base acres or less may combine with another farm only if one of the farms undergoes a change in land ownership, and that to qualify for this exception the owners of each of the farms participating in the new combination must be identical and have identical shares in both farms is an arbitrary and restrictive rule imposed by USDA which runs counter to the intent of the managers and Congress for implementation of Sec. 1101(d)(1) of the Act.

We expect that the Department will defer to areas of clear congressional intent and implement the law in such a manner.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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