Senator Chuck Grassley today released the following after President George Bush vetoed the farm bill. The House and Senate are expected to take up the bill yet tonight for a veto override.
“This bill is far from perfect, but there is a fair amount of reform that helped us nibble away at the apple. Even though we didn't reform nearly enough for either the president or me, I intend to keep the pressure on so real reform can happen. In the meantime, this bill moves us a little further ahead on the road to reform."
Grassley’s Top 10 Reforms in the 2008 Farm Bill
1.
Eliminates 3 entity rule, provides for direct attribution of benefits – The bill eliminates the 3 entity rule which producers use to evade payment limits, and attributes payments directly to people.
2.
Closes fraudulent farm loss loophole that allows operations to evade payment limits and collect payments to dead farmers -- The farm loss limitation in the Senate agriculture tax package was designed to specifically close the loophole that the Government Accountability Office reported in the April of 2004 Finance hearing (
http://www.gao.gov/new.items/d04407.pdf).
At this time, there is no limit on how large a loss a farming operation can take. So, it’s simple accounting to artificially create losses in one entity (the farm entity that receives the Department of Agriculture payments) and then to offset the gains that they shift to other related entities.
3.
Provides more options for farmers to manage risk -- In 2009, farmers will have a choice to participate in crop revenue protection. If participating, the farmer must give up a portion of their direct payments and loan benefits. When farm revenues fall based on the state wide average, farmers will be able to receive protection.
4.
Clarifies that CCC loans and certificates are subject to 1099 reporting -- The Department of Agriculture had taken the positions that CCC loans/generic certificates were actually a “barter” transaction. Because of that, they were outside of the reporting requirements. Treasury and IRS did not agree (much like the ongoing concern over the Conservation Reserve Program, USDA calls it rent, but IRS-Treasury and the courts says that it is a substitution for farming income and then therefore subject to self-employment tax). The legislative language clarifies that the loans/certificates are subject to 1099 reporting.
In addition there was concern that people were taking the position that if they did not receive a 1099 then they did not have to report the income.
5.
Reforms production contracts to give choice to growers in selecting a dispute resolution, ending forced mandatory arbitration -- Growers have been continually subjected to forced mandatory arbitration clauses in their production contracts. The farm bill requires that contracts give producers a free choice as to which tract of dispute resolution they want to use, and makes it a violation of the Packers and Stockyards Act to not make the choice available or pressure the producer into the choice.
6.
Updates provision to allow self-employed farmers to pay additional payroll taxes so they can qualify for Social Security -- A special provision for the self-employed, including farmers and ranchers, to help them qualify for Social Security benefits, hasn’t been updated in many years. As a result, these workers are sometimes unable to qualify for coverage.
The agriculture tax package updates this special provision to allow the self-employed to pay additional payroll taxes, so they can qualify for Social Security.
7.
Includes tax relief on CRP for retired and disabled farmers -- Provides that CRP payments to retired or disabled individuals are to be treated as rental payments for tax purposes and are therefore excluded from self-employment taxes from a trade or business and will therefore not be used to calculate any potential reductions in their retirement or disability checks.
8.
Updates archaic nutrition standards -- The Farm Bill has added $10.3 billion dollars in new spending for this farm bill which totals more than 73 percent of all the spending in the bill. The farm bill increases the minimum benefit, provides over $1.2 billion to food banks, and allows child care costs and retirement accounts to be deducted from food stamp eligibility determinations.
9.
Focuses Broadband Access program on underserved areas -- The new farm bill requires that in order to be eligible, the provider needs to be applying for an area where 25 percent of the people don't have service and where not more than three incumbent service providers are already located.
10.
Provides for right of action for Pigford Claims Act -- The USDA settled a landmark class action lawsuit with African American farmers in 1999. Unfortunately, for a variety of reasons, approximately 75,000 additional black farmers filed their claims of discrimination through the Pigford consent decree process past the deadline for their claims to be evaluated on the merits. As a result, thousands of people continue to be denied an opportunity even to have their claims heard. The farm bill will help black farmers and ranchers, who were unjustly discriminated against while trying to secure farm loans, get the opportunity to have their claims heard.
