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The Department of Agriculture recently announced changes to how individuals can qualify for many farm income subsidy programs authorized by the 2018 Farm Bill (P.L. 115-334). While this rule implements a number of costly expansions to farm subsidy programs, it also appears to narrow the broad “active management” loophole many operations exploit to increase their federal subsidies. By specifying what a “significant contribution” of management is, this rule should be an important step in a decades-long Congressional effort to close farm program payment loopholes.
The effect of the change may be limited, however, because sophisticated farm operations have proven adept at avoiding Congressional efforts to stop bad actors from farming federal programs instead of the soil. Even if USDA puts teeth behind its enforcement efforts, the changes only apply to certain Farm Bill-authorized programs. In recent years federal subsidies delivered through federally subsidized crop insurance and ad hoc disaster programs dwarf the costs of Farm Bill programs. In these programs the Secretary of Agriculture Sonny Perdue has chosen to ignore the will of Congress and broaden eligibility requirements while arbitrarily setting payment limits. Congress should follow this rule and continue its efforts to ensure all programs constituting the farm safety net are limited to actual farmers with actual needs.
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