Letter Barack Obama, President of the United States - Stronger Payment Limitations for Farmers and Ranchers
Letter
U.S. Senator Tim Johnson (D-SD) today led the call for President Obama to put in place stronger payment limitation for farmers and ranchers in South Dakota and across the country. Johnson is concerned about the recent rule promulgated by USDA that keeps in place a flawed definition of "active personal management," which has shortchanged the ag community for two decades.
"I appreciate that the President is moving forward on the issue of payment limitations, but it's important that the next steps are the right ones," said Johnson. "I hope that the Administration realizes the broad consensus that exists about the value of bolstering and targeting farm payment limits. At the end of the day, this is about spending our money wisely."
The letter was sent to President Obama in light of the continued abuse and misuse of farm programs, through which investors are considered to be actively engaged in a farm and can qualify for payments. Out-of-state investors, for example, are reaping tens of thousands of dollars each under current rules simply because of their participation in conference calls.
Johnson cited a 2004 study by the Government Accountability Office that recommended that the USDA adopt meaningful standards for payment limitations, as well as comments released in 2008 that found broad interpretation of this term as resulted in abuse of the subsidy system.
The letter sent to the President by Johnson also had the support of Sen. Mike Enzi (R-WY), Sen. Russ Feingold (D-WI) and Sen. John Barrasso (R-WY).
A copy of the letter is below:
President Barack Obama
1600 Pennsylvania Ave NW
Washington, DC 20500
President Obama:
We write to convey our deep concern regarding the final rule promulgated by the United States Department of Agriculture (USDA) and published in the Federal Register on January 7, 2010, regarding limitations for farm program payments as specified in the Food, Conservation, and Energy Act of 2008.
As USDA itself states in the final rule published on January 7, 2010, "The current regulatory definition of active personal management has been in effect for over 20 years[.]" It is disappointing to see that the final rule, as published, fails to bolster the flawed and long-standing definition of "active personal management" to which previous Administrations have adhered.
A 2004 U.S. Government Accountability Office (GAO) study on farm program payment limitations recommended that USDA adopt meaningful standards for personal management because of the lack of such standards. GAO found that the lack of such standards fostered waste and misuse of farm program payments. In one instance, GAO found that 11 out-of-state partners in a joint venture each qualified for approximately $90,000 in payments exclusively because of their participation in conference calls. The 2002 report of the Commission on the Application of Payment Limitations for Agriculture similarly found that a broad interpretation of active engagement enables abuse of the subsidy system.
Of the 5,060 comments received by USDA regarding the interim payment limitations rule released on December 29, 2008, and as indicated by the Department of Agriculture, "Seventy-three percent of the comments stated that the payment eligibility rules need to be made more restrictive, particularly in the area of the requirements of active personal management." It is greatly disappointing, given public consensus and the need for responsible government, that the flawed payment limits parameters of the past were upheld.
Despite USDA's stated intention to further explore the current definition of active personal management, we believe that the abundance of evidence which already exists shows the rule needs to be changed to reflect and address GAO study's findings.
We thank you in advance for your timely attention to this important matter.
Sincerely,
Tim Johnson Mike Enzi Russ Feingold John Barrasso
US Senator US Senator US Senator US Senator
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