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February
6, 2002
Dear
Senator:
The
organizations listed below represent a significant majority of the production
of food and fiber in the United States. We are writing to urge you and
your colleagues to oppose amendments to new farm legislation, which
would further reduce limitations on farm program benefits below levels
included in the Committee's bill (S. 1731). In testimony presented to
Congress concerning new farm legislation virtually every commodity and
farm organization opposed payment limitations.
One
of the primary objectives of new farm legislation is to improve the
financial safety net available to farmers and to eliminate the need
for annual emergency assistance packages. If limitations on benefits
are made more restrictive than those in S. 1731, a significant number
of farmers will not benefit from the improved safety net. Simply stated,
payment limits bite hardest when commodity prices are lowest. The addition
of new crops (ie. peanuts and soybeans) to the list of those eligible
for fixed and counter-cyclical payments will mean even more producers
are adversely affected by new limitations.
Proponents
of tighter, more restrictive limitations will argue that farm programs
cause farmers to enlarge their operations and that a few are receiving
most of the benefits. Farmers expand in order to achieve economy of
scale and to be competitive in domestic and international markets. Randomly
established limitations and increased regulatory burdens do not promote
efficiency or competitiveness, but they do increase costs and increase
the workload for USDA employees.
One
of the most popular results of the last farm bill was that producers
could spend less time at their county FSA office and more time managing
their farming operations. Farmers felt the government had stopped micro-managing
their business plans. With passage of the Grassley or Dorgan amendments,
farmers can look forward to many more trips to their county FSA office.
In all likelihood they will be required to provide their private tax
records to USDA to prove they do not meet an arbitrary means-test income
limit that disqualifies them from participating in all federal farm
programs.
Please
consider the following:
- If row-crop
producers are forced to reduce plantings due to tighter payment limitations,
acreage will likely switch to specialty crops. Increased production
could drastically impact specialty crop markets.
- A means test,
at any level, disadvantages high value crop producers and livestock
operators.
- Congress enacted
legislation requiring program participants to meet actively-engaged-in-farming
rules and established the 3-entity rule to further limit benefits.
- Marketing loans
are designed to encourage producers to aggressively market crops;
limitations on the operation of the marketing loan would contradict
its primary objective; there was no limit on the marketing loan program
in 1985; since then Congress has reduced the limit to $200,000 (for
all crops) and then to $75,000 before temporarily increasing the limit
to $150,000 in recent years to ensure that the program could achieve
it's objectives in times of extraordinarily low prices.
- A stringent
payment limit amendment will overwhelm FSA employees who will be asked
to implement new farm law in record time and administer these draconian
new limitations.
- The actively
engaged provisions contained in the Grassley and Dorgan amendments
would prevent many widowed farm wives from participating in government
price support programs.
- Recent statistics
released by environmental groups overstate payments by aggregating
5 years of data and failing to account for the sharing of those payments
to individuals in families, cooperatives, partnerships and corporations
listed as recipients.
The
existing limitations in S. 1731 on direct payments, new counter-cyclical
payments and marketing loan gains are not insignificant. Further, the
regulations requiring recipients to meet actively engaged criteria remain
in place and are enforced by the Department of Agriculture.
We
strongly urge the Senate to defeat the Grassley and Dorgan amendments
as well as any other proposals to limit eligibility for economic assistance
during times of low prices when farmers need it most.
Thank
you for your consideration of our views.
American
Society of Farm Managers and Rural Appraisers
Alabama Farmers' Federation
American Farm Bureau Federation
American Soybean Association
Agricultural Retailers Association
National Association of Wheat Growers
National Barley Growers Association
National Corn Growers Association
National Cotton Council
National Grain Sorghum Producers Federation
National Sunflower Association
Rice Millers' Association
Southern Peanut Farmers Federation
US Canola Association
US Rice Producers Association
US Rice Producers Group
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