Obama Retains Subsidy Loophole For Mega-Farms
JOHN CRABTREE, Center for Rural Affairs
Monday, January 11, 2010 7:49 pm
On January 6th, the USDA announced their decision to retain a massive loophole in farm payment limit rules that will continue to allow annual taxpayer funded checks of hundreds of thousands, even millions, of dollars to inure to single farming operations - subsidy checks the nation's largest farms use to drive their smaller neighbors out of business.
President Obama abandoned his campaign pledge to close the payment limit loophole that enables mega-farms to claim uninvolved investors as active farmers. The ruling is particularly troubling because targeting farm program payments to family sized farms was a centerpiece of the rural policy statement that candidate Obama released in Iowa prior to the state's Presidential Caucuses.
The new regulation also directly contradicts the recommendations of the Government Accountability Office and USDA Payment Limitation Commission. USDA notes in the Federal Register that seventy-three percent of the 5,060 comments in response to their proposed rule changes stated that payment eligibility rules should be made more restrictive, particularly with respect to the requirement of "active personal management." However, USDA's final rule does virtually nothing to heed those comments.
In his farm and rural campaign platform, Obama noted that, "Every President since Ronald Reagan has had the authority to close this loophole without additional action by Congress, but has failed to act." Unfortunately, USDA's inaction simply adds another President's name to that list. Another White House has traded subsidy reform for short-term political gain, ignoring, perhaps, that the fate of family farming lies in the balance.
(The Center for Rural Affairs was established in 1973 as an unaffiliated nonprofit corporation under IRS code 501(c)3. The Center for Rural Affairs was formed by rural Nebraskans concerned about family farms and rural communities, and we work to strengthen small businesses, family farms and ranches, and rural communities.)