“Farm payments are not gravy,” said Barry L. Heinkhouse, an irrigated corn producer from Colorado. “That’s what we need to stay in business. We can’t grow corn in our area when it’s selling for less than $2 per bushel.”
Heinkhouse said the falling water table in the Ogallala aquifer that serves eastern Colorado has led to increased pumping costs on the 11,000 acres he, his father, a brother and a brother-in-law farm.
“We and others like us have to farm more acres because the margins are so much smaller in an irrigated corn operation,” he noted. “Kids are leaving our part of Colorado because they can’t make a living in farming. The payment limits in the current law put a cap on what they can earn.”
Corn grower Tim Hume said that if Congress continues to “ratchet down” the limits on farm program payments, it will take away opportunities for other young people to enter farming.
“Without opportunities for success in agriculture, young people will choose alternative careers,” said Hume, board chairman for the National Corn Growers Association and a Colorado grower. “Overly restrictive payment limitations limit these opportunities and discourage young people from entering production agriculture.”
Hume also challenged the Commission to re-evaluate the definitions frequently cited to describe the type and size of family-owned commercial farm operations. He noted that much has changed in agriculture, requiring many producers to expand in order to maintain profitability.
“The Small Business Administration defines a small business as one having $2.5 million to $3 million in assets, which many small- to medium-sized farming operations have today,” he said. “It’s absurd that a farmer with an operation that size has to have a second income from off the farm to keep the farm going.”
It’s not just small- to medium-sized farms that would be affected, said Paul Combs, a rice farmer from Kennett, Mo. Tighter payment limits would impact rural communities negatively, as well.
“Simply put, we can’t stand any more cuts to agriculture,” said Combs, who spoke on behalf of the USA Rice Federation. “Any additional steps to limit farm program benefits will send areas like my hometown in Kennett, Mo., into a tailspin.”
Combs told the Commission that any further restrictions on payment limits that they might recommend would place farmers as a substantial disadvantage domestically and in an international market that is “already unfair for our producers.
“Payment limits disproportionately affect family farmers of highly capital-intensive crops, particularly rice,” he said. “Arbitrary, uniform limits across all program crops hit rice growers first and hit them hardest. And limits on marketing loan benefits are counterproductive because they hit hardest when times are toughest.”
Thomas A. “Tap” Parker, a cotton producer from Lake Providence, La., told the Commission that he began farming 15 years ago with a “FHA loan, a used tractor and 200 acres of land.
“My father died when I was a teen-ager, and I didn’t have any aunts or uncles to help me,” he said. “But I worked hard, and I’ve built my operation up to 4,000 acres. Now I’m having to defend the success of my business against those who want to reduce farm programs.”
Parker said subsidies have become a part of farming in this country because U.S. farmers face increasing competition from subsidized growers and manufacturers in other countries. “Until this situation changes, we need subsidizes to compete on a very unlevel playing field.”
Referring to comments by another speaker that farm payments were preventing young people from entering farming, Parker said, “I’m one of those guys. Changing the payment limits will actually prevent more of us from getting into farming.”