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U.S. subsidy cap debate pits big versus small farmers

Reuters / U.S. farmers would be limited to $125,000 a year in crop subsidies in a significant tightening of farm support rules proposed by four senators from farm and ranch states.

There is no effective limit on payments now. Large operators collect the lion’s share of subsidies because they are based on each bushel of grain or pound of cotton grown on a farm.

“It’s time to get the program back to its original intent,” said Senator Chuck Grassley, an Iowa Republican and a sponsor of the bill who is a longtime proponent of strict limits. He said the farm program, dating from the 1930s, was aimed at protecting small and medium-size family farms.

Besides putting a “hard” cap on payments per farmer, the bill would crack down on payments to investors and absentee landlords. Under it, only one person living in town could collect subsidies for providing management on a given farm.

Passage of the package “would put an end to widespread abuse in farm programs,” said the National Sustainable Agriculture Coalition, which represents small farmers. It said the chances for passage of a new Farm Bill would be boosted by the inclusion of meaningful payment limits.

The senators’ proposal would allow grain, cotton and soybean growers to collect up to $50,000 a year for all crop subsidies and $75,000 annually from the marketing loan program, for a total of $125,000 per farmer. The total would double to $250,000 for a married couple.

At present, there is a $105,000 limit per farmer, or $210,000 per couple, on crop subsidies and no limit on marketing loan benefits, so there is no overall limit on payments.

The senators said a stricter definition of who qualifies for subsidies will reduce the flow of subsidies to investors and absentee owners who take no role in running a farm but who say they provide key management direction.

“For too long farm program payments have gone to producers who do not need the support — and sometimes to people who are not involved in farming,” said Senator Sherrod Brown, an Ohio Democrat.

Payment limits are a perennially divisive issue in U.S. agriculture, pitting cotton and rice growers in the South against the wheat, corn and soybean farmers of the Plains and Midwest, and big operators against small farmers. Cotton and rice have the highest support rates but also high costs of production.

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