Des Moines Register
09-06-07
Farm subsidy bill helps big farms grow, group says
The measure, now in the House, would let a couple receive up to $120,000 in
payments.
By PHILIP BRASHER
REGISTER WASHINGTON BUREAU
Washington, D.C. - An increase in farm subsidy limits contained in the Housepassed farm bill would make it easier for some large farms to expand, a rural
advocacy group says.
The House bill would allow a married couple to receive up to $120,000 in annual
direct payments, up from the current maximum of $80,000.
In Iowa, a married couple would reach the $80,000 cap with about 4,200 acres.
The higher limit would allow them to receive payments on up to 6,300 acres, said
Chuck Hassebrook, executive director of the Nebraska-based Center for Rural
Affairs.
The payments are based on the crops that the farms have traditionally grown and
the historical yields. The Iowa example assumes a farm with a payment acreage
that is two-thirds corn and one-third soybeans. Acreages for other states vary by
the types of crops grown and historic yields.
Hassebrook said the increased payments would allow big farms to pay more for
land than they can now. The annual payments amount to about $30 an acre for
land that was traditionally in corn.
"Somebody who's looking to expand, this will affect their ability to compete for
cash rents," Hassebrook said.
But relatively few farms in Iowa are big enough to reach the current limit, and
economists say commodity prices and production costs are probably bigger
factors than government payments for farmers making expansion plans.
"Quite honestly, the (federal) programs right now aren't really all that important,"
said Iowa State University economist Mike Duffy.
The last farm census showed 1,321 of Iowa's 90,655 farms are at least 2,000
acres in size, according to the U.S. Department of Agriculture.
Sen. Charles Grassley, R-Ia., has pledged to push for tighter limits on farm
subsidies when the Senate Agriculture Committee takes up its version of the
farm bill.
"The current payment limits promote farm consolidation, artificially increase land
prices, and create barriers for a new generation of farmers eager to enter the
industry," Grassley and Sen. Byron Dorgan, D-N.D., said in a letter to the
committee last month.
Backers of the House bill say it includes significant reforms, including abolition of
a rule that would let individuals receive payments through as many as three
entities.
Reporter Philip Brasher can be reached at (202) 906-8138 or
pbrasher@dmreg.com