[Congressional Record Volume 159, Number 22 (Tuesday, February 12, 2013)]
[Senate]
[Pages S658-S660]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Johnson of South Dakota, Mr. 
        Enzi, and Mr. Brown):
  S. 281. A bill to amend the Food Security Act of 1985 to restore 
integrity to and strengthen payment limitation rules for commodity 
payments and benefits; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mr. GRASSLEY. Mr. President, I rise today to talk about the farm bill 
and then specifically about reforming payment limits for farm programs.
  As one looks back to the fall of 2011 and the failure of what was 
referred to as the ``supercommittee,'' we saw many committees continue 
on with business as usual afterwards. However, one committee's members 
took it upon themselves to continue efforts to tackle spending and 
propose meaningful cuts--the Senate Agriculture Committee.
  For that matter, the House Agriculture Committee worked towards that 
end as well. I commend Chairman Stabenow and then Ranking Member 
Roberts for corralling the many ideas of the members of the committee 
to write a bill that cut $23 billion.
  We were able to work in committee to get the bill done. We were able 
to work in a bipartisan manner to get the bill across the Senate floor. 
It is how legislation is supposed to be considered and debated in the 
Senate.
  One of the measures in last year's farm bill was my proposal 
reforming payment limitations in the farm program.
  Adopting reforms to payment limitations contributed to the $23 
billion in savings. Beyond just being a part of saving money, these 
reforms help ensure farm payments go to those who they were originally 
intended--small and medium-size farmers.
  In addition, the reforms include closing off loopholes so nonfarmers 
can't game the system. I will come back to my proposed reforms in a 
minute after I say just a few words about the overall farm bill 
picture.
  As we all know, Congress was not able to complete work on the farm 
bill last year. But that is not for a lack of desire by either the 
Senate nor the House Agriculture Committees. There remains a desire to 
get a 5-year bill passed.
  Supporters of the farm bill need to take a hard look at what 
challenges were presented last year to getting the bill done. We need 
to forge ahead knowing some tough decisions need to be made.
  For the Senate, we need to consider whether it is realistic that we 
only reduce $4 billion out of the nearly $800 billion nutrition title. 
More can and should be done. The nutrition title comprised by far and 
away the largest expenditure in the bill.
  There are more reforms we can make to programs such as food stamps, 
and they are reforms that cut down on waste, fraud, and abuse in the 
program but also safeguard assistance for people who need it.
  There are other programs we need to take a fresh look at. Should we 
accept the status quo on the sugar program? How do we handle dairy 
policy? What policy can we implement in the commodity program that 
won't distort planting decisions but maintains an effective safety net?
  These are some of the many issues we need to debate again and decide. 
I, for one, hope we are able to start soon and work together to get a 
5-year bill completed this year. Our farmers and rural communities 
deserve to have certainty.
  When we do move forward on drafting a new farm bill, I will again be 
pushing for the reforms to payment limitations. That is why today I am 
introducing the Farm Program Integrity Act of 2013 with Senators 
Johnson of South Dakota, Senator Enzi, and Senator Brown.
  The proposed legislation strikes a needed balance of recognizing the 
need for a farm safety net while making sure we have a defensible and 
responsible safety net.
  In case there is any doubt, we do need a farm program safety net. For 
those who argue we do not need a safety net for our farmers, I argue 
they do not understand the danger of a nation which does not produce 
its own food.
  Take Germany and Japan during World War II, for instance. There came 
a point where their soldiers had difficulty fighting because they 
didn't have food to eat. So today their respective governments maintain 
vigorous support for their farmers.
  It is a matter of social cohesion as well. Without a secure source of 
food, we jeopardize our very way of life. Look around the world where 
there is hunger and you see rioting, stealing, and other acts of 
violence. We need our farmers to keep producing our food.
  For all the advances in modern agriculture, farmers are still subject 
to

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conditions out of their control. Just look at the drought that still 
grips much of the U.S.
  Without an adequate safety net, some farmers would be left with no 
ability to make it the following year. That would mean potentially less 
food being produced for an ever-increasing world population. That is a 
scary prospect.
  While farmers need a safety net, there does come a point where a 
farmer gets big enough and financially secure so that he can weather 
tough times without much assistance from the government.
  Somehow, though, over the years there has developed this perverse 
scenario where big farmers are receiving the lion's share of farm 
program payments. We now have the largest 10 percent of farmers 
receiving nearly 70 percent of farm payments.
  There is nothing wrong with a farmer growing his operation, but the 
taxpayer should not be subsidizing large farming operations to grow 
even larger. By having reasonable caps on the amount of farm program 
payments any one farmer can receive, it helps ensure the program meets 
the intent of assisting small and medium-size farmers through tough 
times.
  My proposed caps on payments will also help encourage the next 
generation of rural Americans to take up farming.
  I am approached time and again about how to help young people get 
into farming. When large farmers are able to use farm program payments 
to drive up the cost of land and rental rates, our farm programs end up 
hurting those they are meant to help.
  It is simply good policy to have a hard cap on the amount a farmer 
can receive in farm program payments. We will keep in place a much 
needed safety net for the farmers who need it most. And it will help 
reduce the negative impact farm payments have on land prices.
  Our bill sets the overall cap at $250,000 for a married couple. In my 
State, many people would say this is still too high.
  But I recognize that agriculture can look different around the 
country, and so this is a compromise.
  Just as important to setting a hard cap on payments is closing off 
loopholes that have allowed nonfarmers to game the farm program.
  The bill being introduced today will do this by cutting off the 
ability of these nonfarmers from abusing what is referred to as the 
``actively engaged'' test.
  In essence, the law says one has to be actively engaged in farming to 
qualify for farm payments. However, this has been exploited by people 
who have virtually nothing to do with the farming operation yet receive 
payments from the farm program.
  Our Nation has over $16 trillion in debt. We cannot afford to simply 
look the other way and let people abuse the farm program.
  The Farm Program Integrity Act of 2013 is the same in purpose as what 
it states in the name. This is about increasing the integrity of the 
program.
  My colleagues here in the Senate agreed with me last year as we 
included these pivotal reforms in the farm bill. I am confident these 
reforms will garner similar approval in the 113th Congress.
  I mentioned earlier how we need to assess some of the challenging 
areas of farm policy as we look to pass a 5-year farm bill, and some 
tough decisions need to be made.
  However, my proposed reforms regarding payment limits do not pose a 
tough decision. They are common sense and necessary reforms.
  Mr. JOHNSON of South Dakota. Mr. President, I rise today to join with 
my friend and colleague from Iowa, Chuck Grassley, in introducing the 
Farm Program Integrity Act of 2013, which would establish commonsense, 
meaningful farm program payment limitations. I am pleased that Senator 
Sherrod Brown and Senator Mike Enzi are also joining us in this effort. 
At a time when our country faces significant budgetary constraints, it 
is important that we look for bipartisan and commonsense approaches to 
restructuring programs in such a way that improves their effectiveness 
while also reducing the deficit. Our legislation will do that, and our 
approach has already garnered widespread support.
  The current structure of our farm support program has, in a number of 
ways, failed rural America. In 2008, the largest 12.4 percent of farms 
received 62.4 percent of farm program payments, according to the United 
States Department of Agriculture's Economic Research Service, USDA ERS. 
With such a disproportionate share of the program going to the largest, 
most capitalized operations, the small and medium-sized family farmers 
are squeezed out of the business. The farm bill is intended to provide 
programs that function as a safety net for farmers, but it has instead 
become a cash cow for the few large producers. We must maintain a 
safety net for producers, but the system must be targeted to family 
farmers instead of large agribusinesses.
  The 2008 farm bill took some important steps to strengthen the 
integrity of our farm support system. The bill established an income 
threshold for program eligibility in which payments are limited to 
producers with less than $500,000 in non-farm Adjusted Gross Income, 
AGI, and $750,000 in on-farm AGI, for a total limit of $1.25 million 
AGI. Additionally, the law eliminated the triple-entity loophole and 
required that payments go to a specific individual through direct 
attribution. These were important first steps. However, there is much 
more we must do to restore integrity to our farm programs.
  Under the current law, we have a system of support for producers in 
the form of direct and counter-cyclical payments. Direct payments are 
capped at $40,000 and counter-cyclical payments are capped at $65,000; 
additionally, there is no cap on marketing loan gains and loan 
deficiency payments, and thus, there is effectively no total 
limitation. This is unacceptable. Without a cap on payments, the 
Federal Government is subsidizing producers to get bigger, which in 
turn makes it more difficult for the smaller family farmers, and 
particularly young and beginning producers, to survive.
  Last June, we took some meaningful steps in the Senate to address the 
structure of our farm support system. Senators from both sides of the 
aisle came together to pass the Agriculture Reform, Food, and Jobs Act, 
S. 3240, commonly referred to as the farm bill, with broad support. The 
bill, as passed out of the Senate Agriculture Committee, contained a 
hard cap of $50,000 on payments under the new Agriculture Risk 
Coverage, ARC, program, a program developed to replace the antiquated 
direct and counter-cyclical programs.
  The committee-reported bill also contained important language to 
close loopholes that have allowed ``paper-partners,'' or individuals 
not directly engaged in the farming operation, to receive farm program 
payments. The bill created an important new standard for determining 
who qualifies as a farm manager. In addition to the language 
incorporated into the underlying bill, Senator Grassley and I also 
offered an amendment during floor consideration to cap marketing loan 
gains and loan deficiency payments at $75,000. Our amendment passed 
overwhelmingly with 75 votes.
  The House Agriculture Committee marked up and reported its own 
version of the farm bill reauthorization. Unfortunately, the House 
leadership refused to bring the bill to the floor before the end of 
2012. As a result, Congress was left in the position of having to pass 
an extension of the 2008 farm bill, and push off work on a full 
reauthorization, including the important reforms we included in the 
Senate-passed bill, until the 113th Congress.
  The legislation we are offering today combines the cap on farm 
program payments and language to close loopholes from the Senate-passed 
bill. As Congress proceeds with reauthorizing our farm programs, I will 
continue pushing to ensure that we finally provide for meaningful 
payment limitations and target assistance to small and medium-sized 
family farms.
  As the most important industry in South Dakota, agriculture is the 
economic engine that drives our rural communities. Without viable 
family farmers and ranchers, our small towns and Main Street businesses 
would face significant financial hardships. I have worked with Senator 
Grassley on this issue for a number of years, and I'm proud to once 
again join with him today to continue this important fight.

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