Legislation Closes Farm Payment Limit Loopholes

(Washington, D.C.) – The Council for Citizens Against Government Waste (CCAGW) today endorsed the Rural America Preservation Act, introduced by Senators Charles Grassley (R-Iowa) and Byron Dorgan (D-N.D.).  At the Capitol Hill press conference announcing the introduction of the legislation, Tom Schatz, president of CCAGW, delivered the following statement:

CCAGW applauds Senators Grassley and Dorgan for introducing the Rural America Preservation Act.  Mirroring what President Bush has proposed in the 2006 budget, the legislation would reduce the farm payment limit from the present $360,000 to $250,000.  More importantly, the legislation would close the loopholes that allow an individual to create virtually an unlimited number of entities in order to maximize taxpayer subsidies.

During consideration of the last farm bill in 2002, the Senate included a provision that would have limited farm payments to $275,000 and closed loopholes allowing multiple payments.  Incredibly, even though the House went on record in favor of the stricter limitations in the Senate farm bill, the bill that passed the House actually raised the limit to $550,000, plus kept all the loopholes intact.  Farm bill conferees ultimately compromised with the so-called $360,000 payment limit in the Farm Security and Rural Investment Act of 2002, but so many loopholes were retained that the limitation is meaningless.

Many of the nation’s wealthiest farmers have used their spouses, children, parents, grandparents, aunts, uncles, nephews, nieces, and cousins to create a virtual Christmas Tree of additional farm entities  each entity able to collect up to the limit of $360,000.  This sham has allowed these wealthy farmers to collect millions of dollars in payments.

Long overdue, the Rural America Preservation Act would save taxpayers at least $1.2 billion over the next decade.  As long as the present archaic farm subsidy system is allowed to continue, the benefits should go to those farmers that need them the most.  In order to accomplish this most effectively, the farm payment limit should be reduced to an amount in the neighborhood of $50,000.  The legislation CCAGW endorses today is a good first step in that direction.     

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.