For Immediate Release
October 26, 2005
Contact: Josh Moenning
(402) 438-1598
(Washington D.C.)- Representative Jeff Fortenberry introduced the Payment Limitations Integrity Act of 2005 today in order to strengthen enforcement of existing farm payment limitation regulations and close loopholes that allow abuse. Rep. Stephanie Herseth (D-SD) is an original cosponsor of the bipartisan legislation.
This measure will help farm payments reach their intended recipients, Fortenberry said. The farm community wants the current law to be fairly enforced, and thats the goal of this proposal.
Herseth, the lead Democrat on the bill, said, This bill will help ensure that farm programs benefit true family farmers and ranchers, and particularly smaller operations that rely on the provisions of the Farm Bill as an essential safety net. During a time of tight budgets, when some in Congress are looking to cut farm programs drastically, this is a common sense bill that will save the federal government money by helping to enforce existing laws that crack down on unfair abuse of the system.
The Payment Limitations Integrity Act would curb abuse by specifically defining the active personal management standard now used to determine payment eligibility. It would also clarify regulations on what constitutes a scheme or device deliberately used to circumvent the rules, enabling the USDA to stop more improper payments.
Farm payments should go to farmers and landowners who take risks with each growing season, not to investors who have little or nothing to do with farm operations, Fortenberry said. This legislation will help level the playing field for farm families facing unfair competition from larger operations collecting the lions share of government payments.
Intentional evasion of payment limits has contributed to the increasing concentration of payments, with only 10% of recipients receiving 68% of payments in 2003. Chuck Hassebrook, executive director of the Center for Rural Affairs, applauded the legislation: Tightening these rules is the linchpin in closing loopholes and stopping the creation of paper farms to evade payment limitations.
A 2004 U.S. General Accounting Office (GAO) report found that current USDA regulations were inadequate to preventing abuse of the system and identified various methods that had been employed to evade payment limitations. The report recommended that the USDA improve its regulations by more clearly identifying such schemes and devices and providing a better definition of active personal management.
The GAO report noted one general partnership that farmed more than 50,000 acres, was comprised of more than 30 corporations, and collected more than $5 million in farm payments in 2001. This particular scheme evaded payment limitations by channeling payments through multiple non-farming entities.
###