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February 08, 2002   Email to Friend 

Debra Davis
(334) 613-4686
February 08, 2002

By a vote of 66 to 31, the US Senate voted Thursday in support of an amendment to limit farm subsidies. The amendment, proposed by Senators Chuck Grassley (R-IA) and Byron Dorgan (D-ND), limits direct and counter-cyclical payments to $75,000 and establishes a combined payment limitation of $275,000 for husband and wife.

According to Keith Gray, director of National Affairs for the Alabama Farmers Federation, the Senate is expected to take up the farm bill on Monday (Feb. 11) at noon. Senators are shooting for final passage on Tuesday.

Other provisions of the Grassley amendment would:

• Limit marketing loan gains to $150K to include redemptions with certificates and value of forfeitures (non-recourse to recourse)

• Eliminate the three-entity rule by establishing direct attribution

• Increase limitations on direct and counter-cyclical payments by $50K if husband and wife qualify

• Deny loans and payments to "producers" if adjusted gross income (Sec 32, IRS code) of owner or operator for previous three tax years attributable to farming exceeds $2.5 million and less than 75 percent of adjusted gross income is derived from production or marketing of agriculture commodities

• Require labor for cash and share rent tenants to qualify for their commensurate share of the operation

• Change active personal management to be defined as "providing management on a regular, substantial, and continuous basis to include supervision and direction of activities for on-site services and labor"

The amendment also states that landowners will be actively engaged if share rent, but in all other circumstances landowners must provide active personal management (eliminates absentee landownership eligibility)

"If this amendment if allowed to stand in conference, it would change the most basic tenants of farm policy-the non-recourse loan," Gray said.

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