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Congress May Place Limits on Subsidy Payments to Large Farms Rather Than Cut Food Stamps

Web Note: Although OCA supports limits on the amount of subsidy payments to
large farms, rather than cuts in food stamp programs, what we really need is
a major reorientation of our annual $20+ billion farm subsidies program that
eliminates all "non-green" subsidies and replaces these with subsidies that
help family farmers and ranchers make the transition to organic production,
renewable energy, and development of local markets--not to mention a major
increase in food stamps so that low-income Americans can afford to buy
healthy organic food for themselves and their families. The cuts being
discussed here on payments to large farms are small--comprising 1-3% of our
total crop subsidies from the next five years--and will be circumvented by
large corporate farms, many of who are already incorporated under various
names and fronts in order to get the maximum subsidies per farm. In this
sense, these "cuts" create the impression of reform, while leaving the
current inequitable, non-sustainable system intact. For an overall analysis
of OCA's position on subsidies see:

From: Omaha World Herald

Published Thursday
August 11, 2005

Grassley sees hard cap on ag payments



Iowa Republican Sen. Charles Grassley said Wednesday that he thinks senators
will push for a tighter cap on farm payments this fall, which could
stimulate political good will among urban lawmakers for the next farm bill.

Sen. Chuck Grassley talks about federal farm policy problems during the
Agricultural Policy Summit at Iowa State University on Wednesday.

"I've sensed that the majority of the Senate feels strongly about doing
this," Grassley said in a phone interview with Iowa agriculture reporters.

Grassley will join U.S. Agriculture Secretary Mike Johanns today for a forum
on the 2007 farm bill at the Iowa State Fair in Des Moines. Johanns has been
holding sessions around the country to hear what farmers think does and
doesn't work in farm policy.

As part of the budget reconciliation process, Congress must cut $173 million
from the Agriculture Department budget for next year and about $3 billion
over the next five years. Tweaking the payment cap rules would solve the
budget issue without affecting other USDA programs. And Grassley said a
tougher payment cap could go a long way toward earning some needed political
good will for farmers in Washington.

"If they do work, it will benefit the taxpayers by saving more money,"
Grassley said of the caps. "It will benefit agriculture by having more urban
support for the farm bill in the future."

Payments currently are limited to $360,000 per farm entity. Larger farmers
get around the limit by creating separate entities or family spinoffs to
draw more payments. In debate for the last farm bill, Grassley pushed for a
hard $275,000 per-farm cap that was defeated.

Grassley said a cap proposal does have the support of the White House.

While neither the House nor the Senate has detailed another proposal for the
cuts, a payment cap also would eliminate any discussion about making cuts to
USDA nutritional programs.

"It would also relieve us of any necessity of cutting funds for food stamps
if we can get a strong, hard cap on payments," Grassley said.

A poll released last month by the Kellogg Foundation found that two-thirds
of voters surveyed in Iowa, Kansas and Minnesota supported a $250,000
payment cap. The same poll showed roughly the same percentage of opposition
to cutting food-stamp programs.

Grassley acknowledged that payment caps are strongly opposed by rice and
cotton farmers, who primarily are in Southern states and who draw larger
crop subsidies than Midwest grain farmers. The chairmen of both the Senate
and House Agriculture Committees are "from that part of the country,"
Grassley noted.

"That's going to make it a tremendously difficult obstacle to overcome,
particularly in the House of Representatives."

U.S. Rep. Bob Goodlatte, R-Va., chairman of the House Agriculture Committee,
said last week during a visit to Nebraska that he opposes any attempts to
reopen the 2002 farm bill to enact limits on farm payments. Goodlatte said
the $173 million allotted for farm payments is only a small part of the USDA
budget. Cuts could be made elsewhere, he said.