Grassley pushes for cap on commodity farm payments

But closing 'loophole' could be difficult in a divided Congress

Published: February 18 2013 | 9:25 am - Updated: 28 March 2014 | 11:37 am in

Iowa’s federal politicians tell us that capping farm payments is a good first step toward closing an abused loophole that has been open too long.

But actually closing that loophole is another matter, especially with a divided government in Washington. Sen. Chuck Grassley, R-Iowa, last week introduced an effort to impose hard caps on farm payments of $50,000 on commodity benefits. The proposal was met with a mixed reaction.

Specifically, Grassley’s idea is to cap farm payments above $50,000 (marketing loan payments would be different) because the farm payment system has become too abused by large farms that are taking up too much of the federal payout. He says the bill would “make the system more reasonable.”

The issue is separate from direct payments. The Senate-passed bill last year already ended that practice, but because the House wouldn’t accept the Senate version of the bill and instead simply passed a nine-month extension, direct payments have continued. Grassley said this week the Senate will keep trying to end direct payments.

“It’s trying to solve a problem of the biggest 10 percent of the farmers getting 70 percent out of the farm program,” Grassley said. “The reason for doing this is what farm programs have always done: To help farmers, and to be a safety net, to help them over the hump.”

Democratic support

Grassley has two Iowa Democrats on his side — which very rarely happens — including Waterloo Democrat Bruce Braley and Sen. Tom Harkin.

Braley said he hasn’t seen Grassley’s bill’s language, but he likes the idea, reminding Iowans that he conducted a listening tour of the state before making his decision. He said most Iowa farmers remain concerned foremost about crop insurance.

“Most of the people I talked to overwhelmingly supported it,” Braley said. “They were more concerned about having some kind of a safety net in the form of crop subsidies and getting that type of support system.”

Iowa Senate Democrats such as Harkin also think the idea is worthy. Harkin said most farmers in Iowa recognize that direct payments have outlived their usefulness.

“I think most farmers have believed that direct payment have long outlived their usefulness, and they’re not really fair. And that there should be some meaningful caps on some of these payments. I don’t think the average Iowa farmer would be hurt by these kind of cap,” Harkin said.

At the U.S. Farm Bureau — Washington’s top lobbying firm for the farm industry — executive director Dale Moore is worried about Grassley’s idea.

“Our grass-roots members have set forth a clear policy for their concern, which is that they don’t support any means-testing of farm bills,” Moore told The Gazette. “We don’t support any price-means testing for caps, we recognize there are various pay limits for provisions, and we are going to be working for them to be lower than they already seem to be set in this bill.”

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