As much as he might wish it would just go away, “something will probably have to be done on payment limits in the 2007 farm bill,” House Agriculture Committee Chair Collin Peterson says.
Peterson has let it be known that, unlike some Midwest representatives and senators, he doesn't get too get exercised about the push to reduce payment limits for individual farmers.
“We had quite a discussion on this in our hearings the other day,” Peterson said during a teleconference with reporters. “I told the Conservation Reserve Program people the issue will probably have to be addressed. Stonewalling it will not be a workable strategy.”
Peterson said the Bush administration's proposal to reduce the farm bill's $2.5-million adjusted gross income limit to $200,000 may be more problematic than Agriculture Secretary Mike Johanns expected.
In announcing his farm bill ideas on Jan. 31, Johanns said farmers with an adjusted gross income of $200,000 or more would no longer receive commodity program payments under Title I of the farm bill. The administration also wants to eliminate the three-entity rule and to limit total payments to an individual to $360,000.
“The problem is a farmer may have adjusted gross income of $300,000,” says Peterson, who was an accountant before being elected to Congress from Minnesota. “If you're no longer eligible for farm payments, however, you may experience a loss. So now you qualify for farm payments again.”
Even if it could be made to work, Peterson still thinks it's picking on farmers. “If the administration wants means tests in farm programs, then why not extend it to recipients of Social Security and Medicare?” he said.
Peterson said he isn't sure how his committee will respond to the proposal. “It's too early to answer that question,” he said. “We're trying to get a consensus among the farm groups on that issue. Then, hopefully, we can go forward with a united strategy.”
He's concerned how the proposal will play outside the committee. “If this gets to the floor, a lot of people won't understand all the implications,” he said. “I have to give the secretary credit for coming up with the proposal because it sure sounds good.”
Johanns isn't the only politician who's tried to make hay trashing “million-dollar payments to big producers.” If farmers had a dollar for every time a congressman or senator has said, “20 percent of the producers receive 80 percent of the payments,” they wouldn't need them any longer.
The really sad part is such statements aren't true, according to agricultural economists like Kansas State University's Barry Flinchbaugh, who noted in a recent speech that medium-sized farmers ($100,000 to $500,000 in sales) receive 43 percent of farm payments while large farms (over $500,000) receive 28 percent. Small farmers with less than $100,000 in sales receive 30.5 percent.
But then 96 percent receiving 73 percent of the payments just doesn't have the same ring to it, does it?