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USDA allows unlimited subsidies for mega farms

USDA announced it preserved access to unlimited subsidies for the biggest commodity farms in the country. The final rule on commodity program payment limitations - making it possible for mega farms to draw over a million dollars annually in taxpayer-funded subsidies - will appear in the Federal Register of December 16.

“In 2008, candidate Obama said he would 'take immediate action to close the loophole by proposing regulations to limit payments to active farmers who work the land […] Every President since Ronald Reagan has had the authority to close this loophole without additional action by Congress, but has failed to act’,” noted Ferd Hoefner, NSAC Policy Director. “Unfortunately, President Obama has chosen not to take this needed action, leaving family farmers at a competitive disadvantage and taxpayers on the hook for excessive subsidies.”

“According to USDA, the new rule affects less than four percent of farm operations,” Hoefner continued. “By leaving the loophole door wide open for the other 96 percent, USDA has issued an invitation to farm reorganizations undertaken to maximize subsidies beyond the payment limit. Even for those farms who choose to keep their business structures organized as part of the four percent, the new rule provides for a limit over $1 million a year for the largest farms.”

The proposed rule tightens the farm management definition, requires recordkeeping to back up management claims, and adds a quantifiable test for farm management. These steps, the National Sustainable Agriculture Coalition says, could become key ingredients for real reform if any future Administration should decide to enforce the payment limit and actually close the loopholes.

“Despite these attempts at key aspects of reform, the final rule is fatally flawed and will result in very little change to the status quo other than mega farms scrambling to reorganize to ensure their business structure fits within the changing landscape of sanctioned loopholes,” concluded Hoefner. “We agree with former Candidate Obama that closing these subsidy loopholes is long overdue. Unfortunately, President Obama has chosen not to make that a reality, and we will now have to wait for a future Administration to fulfill his campaign promise.”

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