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Iowa Senator Highlights Payment Loopholes

The shutdown may still be on but the General Accountability Office report on who is "actively involved" in farming.

Published on: Oct 9, 2013

Sen. Chuck Grassley, R-Iowa, is circumventing a closed government to get the word out about a new Government Accountability Office report on eligibility requirements to receive farm payments. The report affirms that language included in both the House and Senate versions of the new farm bill (still awaiting conference committee review) would be an adequate fix to the GAO findings.To make the news known, even with GAO involved in the shutdown, Grassley posted the report on his own website.

In a press statement about the report, Grassley says that the report "shows that there is still far too much subterfuge of the actively engaged law. For instance, taxpayers are footing the bill for farm payments to 11 active managers of one farm, who supposedly provide significant management experience, yet perform no labor."

FARM PAYMENTS: Who is an active manager? Thats a question a new GAO report explores. New farm bill would tighten the definition.
FARM PAYMENTS: Who is an active manager? That's a question a new GAO report explores. New farm bill would tighten the definition.

Grassley advises conferees on the farm bill that they should take note of this report and take a "hands off approach" to the provisions in the House and Senate farm bills. "This is just one more reason my payment limits provisions included in the Senate and House bills - placing a hard cap on farm payments and closing loopholes that allow non-farmers to game the system - should stay untouched," Grassley says.

Here are some highlights of the report, as pointed out by Grassley:

* Farm Service Agency officials consistently said current ‘actively engaged’ regulations are too vague to enforce in a meaningful way.

* Farms organized as general partnerships receive the most in payments and have the highest percentage of members receiving payments based on ‘active personal management only.’ General partnerships with 11 or more individual members received 84% of their farm payments based on members contributing ‘active personal management only.’

* Operations that have members determined out of compliance at the local level for not being able to demonstrate adequate knowledge to contribute ‘active personal management’ have appealed the decisions to the state and federal levels and won because they have time to prepare the individual in question. In one instance, an individual was still allowed to receive farm payments after failing two interviews with state and local USDA officials.  The individual finally persuaded a national official in the third attempt that they had adequate knowledge of the farming operation.

* A farm in the Midwest which received roughly $400,000 in payments for 2012 was organized as a general partnership with six corporations and 11 individual members of the same family who ranged in age from 18-88. Publicly available data indicated two of the individuals, including the 88 year-old, lived in South Florida and claimed ‘active personal management only’ for eligibility purposes.

The National Sustainable Agriculture Coalition issued a statement in favor of the GAO report. Fred Hoefner, NSAC policy director, notes: "The new [GAO] report is a very helpful and timely reminder of why both the House and Senate have now voted for new farm bills to close the management loophole in the 'actively engage in farming' rules."