USDA extends comment period on payment limitation rules

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Agriculture Secretary Tom Vilsack today announced he will extend the comment period for the 2008 Farm Bill Farm Program Payment Limitation and Payment Eligibility rulemaking process.

Vilsack discussed his priorities as Secretary of Agriculture during a teleconference call today with agriculture and other reporters across the country and said that as part of the regulatory review process outlined by the White House and Office of Management and Budget (OMB), he is directing the Department to extend the comment period for the payment limits rule for an additional 60 days.

"Let's be clear - in no way is this move a signal that we will modify the rules for the 2009 crop year," Vilsack said. "Sign up has begun and it's important that clear and consistent rules remain in place so that producers can prepare for the crop year and manage their risk appropriately."

To date, USDA has only received seven comments on the payment limits rule and Vilsack says that by extending the comment period additional farmers and other interested parties will have the opportunity to comment.

"In keeping with President Obama's recent pledge to make government more transparent, inclusive, and collaborative, I would like to pursue an extended comment period so that more farmers and other individuals can participate in this rulemaking process," he said. "I'm particularly interested in suggestions that would help the Department target payments to farmers who really need them and ensure that payments are not being provided to ineligible parties for future crop years."

Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, welcomed the announcement. "The extension announced today is a common sense approach toward careful farm bill implementation. It will allow adequate time for everyone interested in the program to weigh in and provide suggestions that would help target payments and ensure payments are going to those producers for whom they are intended," Harkin said.

Before Vilsack was confirmed as secretary, U.S. Senators Byron Dorgan, D-N.D., and Chuck Grassley, R-Iowa, sent a letter to Vilsack urging him to close a major farm payment program loophole and ensure that payments are going to active farmers. The senators say that every year, millions of dollars in taxpayer funds are going to non-farmers who are gaming the farm program.

"For years we have fought to ensure that farm program payments go only to those actively farming. While we will continue to push legislation to focus the farm program payment system on family farmers, you have the authority to close loopholes that allow non-farmers to exploit the farm program to the tune of millions of dollars every year," the senators wrote in the letter. "We are pleased that President-elect Obama has recognized that there are loopholes in the law and has called for greater enforcement of the farm payment program,•bCrLf

The Food, Conservation, and Energy Act of 2008 put in place new guidelines on farm program payments. But a glaring loophole was left open that allows individuals to receive farm payments through vague and ambiguous criteria. Under this rule, someone could participate in an annual conference call about planting decisions and claim a federal farm program payment on the grounds that they "manage•bCrLf the farm, the senators claim. As Agriculture Secretary, Vilsack will have the authority under existing law to amend this rule and put in place a test of management activity that is measurable and certain.

USDA's original changes

With the publication of an interim final regulation in the Federal Register at the end of December, the United States Department of Agriculture announced changes to both Adjusted Gross Income (AGI) qualifications, program payment limitations, and direct attribution for Farm Service Agency (FSA) and Natural Resources Conservation Service (NRCS) programs, which became effective in accordance with the 2008 Farm Bill.

Public comments on this interim final rule were to be submitted to the Department within 30 days of the date of publication.

For commodity and disaster programs, the AGI limitation was reduced from $2.5 million AGI from all sources to a three-year average non-farm AGI of $500,000 such that a person or entity shall not be eligible for such programs if the non-farm AGI exceeds $500,000. Also, under the new regulations, an individual or entity must have a 3-year average AGI less than or equal to $750,000 per year from farm income in order to qualify for direct payments issued under the Direct and Counter-cyclical Program.

For more information, visit USDA's release on the rule change.


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