Agricultural News
Grassley Says Changes Needed to Close Farm Payment Loopholes
Tue, 08 Oct 2013 16:37:32 CDT
Iowa Senator Chuck Grassley released a Government Accountability Office report Tuesday showing additional changes are needed to the eligibility requirements for being actively involved in farming.
"The report shows that there is still far too much subterfuge of the actively engaged law. For instance, taxpayers are footing the bill for farm payments to 11 active managers of one farm, who supposedly provide significant management experience, yet perform no labor," Grassley said. "The loophole has been allowed to stand for too long. It's time to close it once and for all and put the issue to rest so we can maintain a safety net for the farmers who really need it."
The GAO report reviews the Farm Service Agency's compliance review of farming operation members' claimed contributions of active personal management and personal labor. It also examines the FSA's state offices' timeliness in completing and reporting compliance reviews and the results.
Grassley said that the conferees to the farm bill should take notice of the report and take a hands off approach to the provisions in both the House and Senate bills
The GAO recommends Congress consider modifying the definition of significant contributions of management activities
Among the report's conclusions:
• Farm Service Agency officials consistently said current 'actively engaged' regulations are too vague to enforce in a meaningful way.
• Farms organized as general partnerships receive the most in payments and have the highest percentage of members receiving payments based on 'active personal management only.' General partnerships with 11 or more individual members received 84 percent of their farm payments based on members contributing 'active personal management only.'
• Operations that have members determined out of compliance at the local level for not being able to demonstrate adequate knowledge to contribute 'active personal management' have appealed the decisions to the state and federal levels and won because they have time to prepare the individual in question. In one instance, an individual was still allowed to receive farm payments after failing two interviews with state and local USDA officials. The individual finally persuaded a national official in the third attempt that they had adequate knowledge of the farming operation.
• A farm in the Midwest which received roughly $400,000 in payments for 2012 was organized as a general partnership with six corporations and 11 individual members of the same family who ranged in age from 18-88. Publicly available data indicated two of the individuals, including the 88 year-old, lived in South Florida and claimed 'active personal management only' for eligibility purposes.
You can find the full report at www.grassley.senate.gov/issues/upload/Agriculture-10-08-13-GAO-report-on-actively-engaged.pdf
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