Legislation would tighten farm subsidy rules

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The Rural Blog

Billionaires continue to receive farm subsidies; legislation would tighten rules

“The federal government paid $11.3 million in taxpayer-funded farm subsidies from 1995 to 2012 to 50 billionaires or businesses in which they have some form of ownership, according to a report released Thursday by the Environmental Working Group, a Washington-based research organization,” Ron Nixon reports for The New York Times. EWG “said its findings were likely to underestimate the total farm subsidies that went to the billionaires on the Forbes 400 list because many of them also received crop insurance subsidies. Federal law prohibits the disclosure of the names of individuals who get crop insurance subsidies.”

“The report is being issued as members of the House and Senate are meeting to come up with a new five-year Farm Bill,” Nixon notes. “The authors of the report said it is timely, given that lawmakers are debating a House proposal that would cut nearly $40 billion over 10 years from the food-stamp program, which helps provide food for nearly 47 million people. A Senate provision would cut $4.5 billion over the same period.” Scott Faber, EWG's vice president for government affairs, told Nixon, “The irony is that farm subsidies are going to billionaires at the same time that there are proposals to kick three to five million people off of food stamps. This clearly highlights the need for reform to our farm programs.” (Read more)

The Times did not mention that the House and Senate have both passed legislation requiring “individuals to 'make a significant contribution of personal labor' to a farm in order to receive benefits,” Phillip Swarts reports for The Washington Times. Daren Bakst, an agricultural policy analyst at the Heritage Foundation, a conservative think tank, told Swarts, “It’s a change that’s long overdue. It’s been an abuse that’s existed that’s allowed people who really have no role in farming to get payments.”

Part of the confusion involves the wording of who receives subsidies and how it wis interpreted. “The money went to support not only farm workers but also managers. Yet the definition of what qualified as 'management' was too broad, according to the Government Accountability Office, Congress's chief watchdog arm,” Swarts writes. “The Farm Service Agency that oversees the funding had difficulty determining 'whether an individual had made a significant contribution of active personal management, potentially allowing individuals who may have had limited involvement in a farming operation to receive payments,' GAO said.” Sen. Chuck Grassley (R-Iowa) said in a release, “The loophole has been allowed to stand for too long. It’s time to close it once and for all and put the issue to rest so we can maintain a safety net for the farmers who really need it.”

The Rural Blog is a digest of events, trends, issues, ideas and journalism from and about rural America, from the Institute for Rural Journalism and Community Issues, based at the University of Kentucky.