Four Senators (two Democrats and two Republicans) this week introduced a bill “The Farm Program Integrity Act of 2013″ to place a cap on farm payments that an individual farmer can receive and try to close “certain perceived” loopholes in the farm payment program. This bill closely follows language that was included in the original 2012 Senate farm bill proposal.
The bill would establish a per farm cap of $50,000 on all commodity program benefits plus $75,000 on any loan deficiency payments and marketing loan gains. This would result in an overall $125,000 per farm cap which is doubled for a husband and wife. The $50,000 cap would apply to any new farm programs that are developed as part of the final 2013 farm bill (assuming one gets done).
The bill tries to close the perceived loophole that currently allows “non-farmers” to qualify for federal farm payments. This provision will prevent non-farmers from being able to use the management “loophole” that is in the current law. The bill would clearly define the scope of people who qualify as actively engaged in farming by only providing management for the farming operation. However, like most law, it is our opinion that “clearly define the scope” will not be quite as black and white as the Senators would like.
Both the National Farmers Union and the National Sustainable Agriculture Coalition support the bill.
On another related note, as part of the Sequester talks, there is a chance that 2013 Ag payments may be reduced. The discussion right now is an 8% haircut, but we know anything is possible in this process.
We will keep you posted.
Paul Neiffer, CPA