US House farm plan would drop aid to millionaires
WASHINGTON, July 17 (Reuters) - The chairman of the House Agriculture Committee proposed on Tuesday to bar millionaires from collecting U.S. crop and land stewardship subsidies, a reform that may aid passage of the new U.S. farm bill.
Chairman Collin Peterson proposed farm subsidy changes that include a ban on collecting subsidies indirectly, such as through affiliated businesses, and require payments to be tracked to individuals.
"After talking to various groups and reform advocates, I believe the proposal we will consider is a sound compromise that no one is satisfied with but nonetheless represents reform," said Peterson.
Under current rules, grain, cotton and soybean farmers can collect up to $360,000 a year, but the limit can be evaded by using so-called commodity certificates.
House Speaker Nancy Pelosi has pressed for more stringent subsidy rules as an emblem of farm reform in the new farm law, as have fiscal hawks, environmentalists and small-farm advocates.
Peterson called the proposal to set a strict eligibility limit and eliminate the rule allowing growers to collect subsidies directly and through two affiliated operations "a big change" that would save $522 million over 10 years.
"We have our leadership on board with this as reform," he said.
Growers are eligible for farm supports if they have an adjusted gross income of less than $2.5 million; there is no cut-off if more than 75 percent of their income is from agricultural operations.
The Bush administration suggested crop subsidies be denied to people whose average AGI exceeds $200,000 a year, but has proposed no change in eligibility for stewardship programs.
Peterson said the $1 million AGI limit would be a "hard cap" with no exemptions and would apply to crop and stewardship programs. Growers would be limited to $60,000 a year in so-called direct payments and $65,000 in counter-cyclical payments made when returns are below targets set by law. There would be no limit on income from price supports, however.
Nebraska Republican Jeff Fortenberry and North Dakota Democrat Earl Pomeroy agreed reform is needed when big farmers claim the lion's share of farm payments.
"Some of the payments were excessive," said Pomeroy.
Deputy Agriculture Secretary Chuck Conner estimated the $1 million AGI cut-off would deny subsidies to about 9,500 growers and landowners, compared to 38,000 operators under the administration proposal.
A congressional staff worker said $1 million AGI limit would apply separately to farmers and spouses, effectively a $2 million AGI per farm.
Virginia Rep. Bob Goodlatte, the Republican leader on the Agriculture Committee, said the farm bill "does not stand a fighting chance" on the House floor unless the panel nailed down money for public nutrition, bio-energy, stewardship and specialty crops. The committee traditionally resolves all issues before approving a farm bill. Continued...
