No more exploiting payment loopholes, focus farm programs on farmers

Legislators have some work to do before the next Congress begins Jan. 3, 2019.

The 2014 farm bill expired on Sept. 30. Now that a lame duck Congress is back from campaigning in their districts, there are two possibilities. Either the farm bill conference committee marries the two wildly divergent bills put forth by the House and Senate, or Congress can revive the 2014 bill for one more growing season.

{mosads}Whatever path they choose, lawmakers must strengthen common sense payment limits for farm bill commodity programs. The Senate version of the 2018 farm bill includes a provision from Sen. Chuck Grassley (R-Iowa) to close a loophole that allows farm businesses to claim an unlimited number of “managers” to qualify for taxpayer subsidies. These “managers” are eligible for up to $125,000 annually in farm subsidies — or $250,000 for a married couple. Even if they have never stepped foot on the farm. Employees who help navigate Department of Agriculture (USDA) paperwork, help decide which crops to plant, or perform “any other management functions reasonably necessary” qualify. In other words, it is now possible to farm by Facetime and cash checks from the Treasury.

Not surprisingly, the Government Accountability Office has reported agricultural businesses exploiting this loophole. In 2015 alone, the USDA sent $260 million to absentee “managers” of general partnership farms who did not live or work on the farm, and 150 farms reported 11 or more absentee “managers,” making each farm eligible for in excess of $1 million, just from this one subsidy. All at the taxpayers’ expense.

With our nation’s debt nearing $22 trillion and annual deficits exceeding $1 trillion on the horizon, we cannot afford to continue such egregious policy. Which is why Taxpayers for Common Sense, along with conservative and free market organizations, sent letters to Congress on June 13 and Nov. 13 in support of common sense payment limits for farm bill commodity programs.

Grassley’s proposal would limit the number of extra managers any farm entity could claim to one, and it would ensure only farmers who actually put in the work are eligible. Although this seems like a no-brainer, some farm bill negotiators have held up all progress on the farm bill to protect this loophole, which effects 2 percent of (absentee) farmers.

This reform has bipartisan support and was adopted by both the House and Senate during the 2014 farm bill debate. Unfortunately, the 2014 farm bill conference committee watered down the applicability of the reform, rendering it meaningless. President Trump included this reform in his FY19 budget request to Congress, and now the 2018 farm bill negotiators have an opportunity to finally close this loophole and bring some much-needed fiscal accountability to these programs.

The Grassley amendment to close the active management loophole in the 2018 farm bill will help produce a farm safety net focused on individuals actually facing the day-to-day risks of farming, not those choosing to farm the programs looking for special interest handouts. Congress must close this subsidy loophole in order to rein in unnecessary spending and ensure that taxpayer dollars are spent wisely.

Joshua Sewell is a Senior Policy Analyst at Taxpayers for Common Sense.