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As with any farm bill there are nuances that aren't fully understood until its all said and done. In a previous post, Tax Provision Tweaks in This Year's Farm Bill, a reader had a few questions and I thought I would share the answers. Please let me know if you have particular questions about specific interpretation of the law, and I'll do my best to accurately find the answer.
Reader question: In your recent blog discussing the new farm bill, you stated that direct payment "nominal limits" increased from $40,000 to $50,000 per person under the new bill. I have read elsewhere, however, that although some legislators were pushing for that change, they ended up settling at the last minute for the previous limit of $40,000. Can you clarify?
Answer: In last minute negotiations the nominal limit was set at $40,000 for direct payment limits.
Also, can you briefly explain how the spouse rule works in regards to direct payments? Does the rule double the allowable payment limit, or does it allow payment on double the amount of acres farmed? In other words, if you grew 1000 acres of corn at 170 bu./acre times $0.28/bu. (at 85%), you'd reach the $40,000 limit. So in that case, would the spouse rule mean you and your spouse would qualify for $80,000 in direct payments for the 1000 acres in question, or does it mean you would qualify for $80,000 if you were to grow 2000 acres (assuming the same yields)?
Answer: The spousal rules have remained unchanged from the previous farm bill. So the $40,000 direct payment limitation can be doubled to $80,000 ($40,000 for each spouse) if you can qualify your spouse as having ownership of that crop and being actively engaged in the operation.
If you averaged 170 bu./acre on 1,000 acres, you would reach the $40,000 limit. The payment limit is not determined by acres per person but only by the total amount paid. By using the same scenario you would reach the spousal $80,000 limit on just shy of 2,000 acres.
Keep the questions coming! Post a question below or send an email to jfatka@farmprogress.com.
Policy is one of the most important issues facing farmers today, but often the most difficult to digest. Jacqui Fatka has a passion to decode the often difficult world of agricultural policy into terms understandable for today's ag players.
Fatka joined the Farm Progress team as E-Content Editor in August 2003 after graduating from Iowa State University. Prior to full-time employment with Farm Progress, she interned at Wallaces Farmer magazine, Iowa Sen. Chuck Grassley's press office and the Iowa Pork Producers Association and freelanced for National Hog Farmer. She also worked as a public relations consultant with Iowa Industries for the Future, an effort to bring together major players in the biorenewables industry.
Currently Fatka is a staff editor at a sister publication, Feedstuffs. For Farm Futures she regularly tells the story of ongoing agricultural policy changes. Her byline can also be found on management profiles.
Fatka grew up on a grain and livestock farm near Atlantic, Iowa. She currently lives in central Ohio with her husband Eric.
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