The writer, of Ames, Iowa, is a senior policy associate for the Center for Rural Affairs.
Farming is more than a job and more than a career — it’s a risky way of life. While every business and job has risk, agriculture takes the cake: Not only are there market, labor and legal risks, but a farmer’s success also hinges on the weather.
This is why Congress established a safety net — an invaluable system of commodity payments, crop insurance and other programs that help out our nation’s farmers when times are tough.
Unfortunately, a recent Government Accountability Office report shows abuse of the farm safety net.
For commodity payments, Congress set a limit at $125,000 per “person or legal entity.” However, GAO demonstrates that some operations receive well beyond that, via a loophole that allows several individuals or legal entities associated with a farm to claim government payments.
What does that mean in practice? Of the 95,417 farms nationally that received payments in 2015, the 50 farms that received the largest payments scored nearly $900,000 each.
And the top farm? It received $3.7 million from the federal government. That’s not a farm, that’s a boondoggle, and the taxpayers are the ones swindled.
GAO revealed those 50 farms are almost all organized as general partnerships, which means multiple entities within them could qualify for these payments.
The eligibility rules for payments contain the loophole allowing gross abuse of the farm safety net. To receive a payment, an individual must prove he or she is “actively engaged” in the farm — they must contribute their labor and/or management.
This wouldn’t be so bad if everyone claiming farm payments was putting in their own personal muscle and grit. The leak of taxpayer dollars comes from individuals claiming to contribute to farm “management.” GAO shows that, as the number of members in a general partnership goes up, the number claiming payments for their own labor actually decreases. For those operations with 11 or more “actively engaged” individuals claiming payments, nearly 85 percent of them contributed only through management.
The last time I checked, farming meant being up at all hours, in all types of weather, doing what needs to be done. It doesn’t mean sitting in an office and collecting a check.
Stepping back, the harm here is more than a shocking price tag for taxpayers. How can the neighbors of these 50 farms fairly compete? These operations are receiving an unfair advantage, making fair “competition” nearly nonexistent.
The next farm bill offers an opportunity to fix this loophole, and it would not be a new proposal. Both the House and the Senate drafts of the 2014 farm bill included legislation to close these loopholes and clarify what it means to be “actively engaged.” Unfortunately, these provisions were removed during the conference committee and were not included in the 2014 farm bill.
Chuck Grassley, the seven-term senator from Iowa, has been steadfast in his support for sensible and effective limits on farm program payments. Our other senators from farm country would do well to do the same.