The House is set to return after Labor Day. The task facing some of the returning lawmakers is marrying two wildly divergent House and Senate farm bills into one that can pass both chambers. While most people in Ag are focused on assessing the damage unleashed by the Trump Administration’s trade war, some lawmakers are using the disruption to try and pass a farm bill that backslides on reform.
Finding a compromise will be quite a challenge.
House Vs. Senate
The House mainly focuses on reforming the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), requiring able bodied adults without children to increase employment or participate in a vastly expanded and untested USDA job training program. The bill also picks off Democratic favorites — eliminating the Conservation Stewardship Program and all guaranteed funding for farm bill energy programs. Then we get to changes intended to increase federal spending on farm income subsidy programs.
In a brazen cash grab, the bill expands the definition of “family member” to include “first cousin, niece, and nephew.” So even more members of a family can claim an interest in a farming operation, often through “active management only” – meaning they never have to step foot on the farm, but can provide guidance on planting decisions, marketing of crops, or even how to fill out USDA paperwork. This “management” makes each person eligible for up to $125,000 in annual subsidies. And if they’re married, spouses can get another $125,000. For those lucky enough to own land growing peanuts, they can get an additional $125,000 just for those peanuts. Each of them. (That’s potentially $500,000 in one year for one married couple, in case you lost track.)
In contrast, the Senate bill is mostly business as usual, with a few small steps in the right direction and one bigly change. The bill directs the USDA to fix crop insurance to stop discouraging producers from undertaking conservation practices proven to reduce their risks. It encourages collection of performance data in conservation programs so taxpayers and farmers get a better return on their investment. And Senator Grassley (R-IA) successfully championed an amendment to focus farm safety net programs on actual farmers by closing the “active management only” loophole. This is a big deal.
Narrowing The “Active Management Only” Loophole
Reining in this loophole is a logical step in a 30-year Congressional odyssey to focus federal farm programs on, well, actual farmers. The Grassley amendment would make it so anybody working on the farm continues to qualify, even if part of their job is managing rather than manning the combines, but would limit each farm to one person claiming “active management only”.
This narrowing is important because the loophole is enormous. In 2015 one farm consisting of 34 partners claimed 25 active managers (10 of whom had spouses) and received $3.7 million in subsidies. A previous government audit of farm programs found an 11-member family farm in the Midwest where the two claiming “active management only” were a recently turned 18-year old and an 88-year-old with an address in South Florida. Any visit to farm country will get you countless stories of kids, siblings, grandkids, or great uncles, who “actively manage” a farm from their dorm room, desk in the city hundreds of miles away, or deck chair in that Florida retirement community. And there’s data to back it up.
The Ag Committees have a history of misusing disasters, economic anxiety, and legislative crises to push harmful farm bills. In 2011 Ag Committee leadership pointed to their farm bill’s fake $16 billion in spending reductions as a reason to shoehorn their bill into the Super Committee working (ultimately unsuccessfully) on deficit reduction – even though that bill’s “savings” were paired with a projected cost of nearly $1 trillion in spending. The next year they tried again, using drought and the farm bill’s projected $3.67 billion in disaster aid (spread over ten years) as an excuse to pass the same trillion dollars worth of programs. Just this spring, cotton and dairy interests obtained $1.2 billion in new subsidies by latching onto the Bipartisan Budget Agreement. And on and on.
Keep Your Eye On The Bill
But an $867 billion farm bill and the safety nets it governs are too important to be handled haphazardly. Congress must not let the fallout from Trump’s trade war allow a farm bill that undoes decades of progress in creating a farm safety net that’s more cost-effective, transparent, responsive to need, and in which all are held accountable for results. Congress should turn its attention instead to providing the stability and certainty agricultural businesses need, by legislating an end to Trump’s trade war. And they should ensure any bill that ultimately is produced contains a farm safety net focused on actual farmers.