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Billionaires and Beach Bums Should Not Receive Farm Subsidies

Thursday, November 15, 2018

Farm subsidies should help farmers, not billionaires and beach bums, right?

Under current law, almost 20,000 residents in the nation’s 50 largest cities received farm subsidies last year, including hundreds who have received payments for 33 straight years.

One of these “farmers” lives in a beachside mansion on Osprey Island, Fla., worth $7.8 million. He’s received a payment every year between 1995 and 2017, totaling $839,000.

Sounds like he’s farming the Treasury, not a farm field.

Now that the current farm bill has expired and the election is behind us, congressional leaders have some big decisions to make about the future of our farm subsidy system.

The Senate version of the farm bill would build on past farm subsidy reform efforts by modestly tightening an existing means test and ensuring that only farmers who contribute personal labor are eligible for subsidies. More could be done to better target taxpayer-funded payments to those who need them most, but at least these reforms are moving in the right direction.

By contrast, the House version of the farm bill goes in the wrong direction.

The House bill would waive the farm subsidy means test first established in 2002 for certain corporate farms, once again making billionaires like Charles Schwab eligible for farm subsidies.

Before 2008, 50 billionaires received subsidies for commodity crops like corn and soybeans, according to USDA data. Congress began denying subsidies to farm households with adjusted gross income, or AGI, above $2.5 million a year, and has since lowered that means test to $900,000 (or $1.8 million for farm couples).

The Senate bill would lower the AGI again, to $700,000. But Section 1603 of the House bill would waive the means test entirely for certain “pass-through entities,” inviting currently ineligible farms to reorganize to get back on the farm subsidy gravy train.

In addition, the House bill would add new branches to the subsidy family tree by making cousins, nieces and nephews eligible for farm subsidies.

In May, the Government Accountability Office found that almost one-fourth of farm subsidy recipients in 2015 did not provide personal labor on the farm, but the House farm bill would exacerbate this.

Suffice it to say, the future of our farm subsidy system is at a critical turning point. Will congressional leaders deny subsidies to the super-rich and city slickers? Or will they ensure that subsidies flow to actual farmers in times of need?

There’s still time for Congress to finish work on a new five-year farm bill. A good farm bill would embrace the reforms in the Senate bill, as Sen. Chuck Grassley, R-Iowa, and House Freedom Caucus Chairman Rep. Mark Meadows, R-N.C., have proposed.

Recent polling found that nearly 90 percent of voters in Kansas and Texas say farm subsidies should flow to family farmers, not millionaires and billionaires, and that only people who live and work on farms should get taxpayer support. We agree.

 

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