Grassley, chairman of the Senate Finance Committee and a corn and soybean farmer, did not specifically say when he would introduce the measure, but most observers expect him to offer it as an amendment to the FY04 agricultural appropriations bill.

The Senate is expected to take up the bill when it returns from its August recess on Sept. 2. Once the Senate approves the spending plan, it must be resolved with the House appropriations bill, which contains no new language on payment limits.

“If it’s germane to the agriculture appropriations bill, I expect to pursue payment limitations similar to what I had last year,” Grassley told reporters during a telephone news conference. Last year’s amendment would have limited a farmer to $225,000 to $275,000 in farm program payments.

“The point is we’ve always had a farm program that is geared to helping medium- and small-sized farmers,” he noted. “I don’t think we’ll ever have a farm program as long as 10 percent of farmers get two-thirds of the benefits.”

The renewed debate over payment limits may coincide with the release of a report by the Commission on the Application of Payment Limitations to Agriculture, a 12-member panel created by Congress to review the issue. The report is expected to be released in early September.

During a hearing at USDA in June, Commission members were told that lowering the payment limits would disrupt the operations of many producers and lead to increased production of corn and soybeans, the two largest crops in Grassley’s home state.

Few have attempted to speculate on the recommendations that the Commission, chaired by Keith Collins, USDA’s chief economist, would make on the divisive payment limits issue.

The Senate passed a payment limit amendment authored by Grassley and Sen. Byron Dorgan, D-S.D., in its version of the Farm Security and Rural Investment Act of 2002. The amendment did not survive the farm bill conference report in its entirety, but the new law did include a $2.5 million means test on adjusted gross income for program recipients that Grassley proposed.

Current rules limits individual farmers to $360,000 in payments, but producers have been able to claim more payments by participating in multiple entities that reflect the size of their operations. Grassley’s amendment would place a “hard cap” on payments to a single farmer and would eliminate the use of generic commodity certificates for farmers who exceed the limit on marketing loan gains.

Washington observers say Grassley’s amendment may pass the Senate, but would face stiff opposition in the House of Representatives.

Such forecasts have done little to stifle Grassley’s determination. “I intend to keep this ball in the air,” he told reporters.

e-mail: flaws@primediabusiness.com