What does it take to be a federally subsidized ‘farm manager’?

I’ve written before on one of the more egregious aspects of federal farm payments, namely that they frequently go to those who aren’t actually farming. I last wrote specifically relating to the direct payments program, but the problem is widespread in other commodity programs as well. In fact, the U.S. Department of Agriculture pays about $5 billion each year to producers involved in “farm management,” all without a strict definition of what this “management” must entail.

Fortunately, both the House and Senate farm bills include language strengthening the rules surrounding “active engagement” in farm management. But per usual in Washington, simply having the approval of both chambers of Congress isn’t enough to ensure this vital provision makes it through conference. In fact, given who sits on the conference committee, it seems likely to be removed.

Currently, the USDA’s Farm Service Agency (FSA) makes payments to anyone involved in farm operations who claims to be actively engaged in management, defined as either contributing significant personal labor or active personal management. But verifying an individual’s contributions is difficult, as the definition of active personal management is broad (so broad, in fact, that you can claim to actively manage a farm you have never stepped foot on).

The result is unsurprising. For many farms, individuals scattered across the country claim active personal management and receive payments. In a recent Government Accountability Office report examining FSA oversight, FSA officials acknowledged the difficulty of confirming these claims, given both distance of the recipients and the subjectivity of the requirements. The report went on to highlight six farms, each in different states, where numerous individuals or corporations each received between $372,365 and $651,910 for engaging in farming. But of these six farms, only one had individuals claiming to have contributed personal labor. When it came to compliance reviews, FSA officials only completed 24 percent on time in 2009 and 14 percent in 2010.

The GAO concluded that Congress should move to further define active management to protect the taxpayer from abuse. The House and Senate bills address the problem by requiring personal labor to be actively engaged, unless a farm is granted an exemption.

Farm payments have been a boon to those farming (or “actively managing!”) cotton, rice, peanuts, soybeans, corn and wheat. For many southern farmers, the commodity title, which contains these payments, is the main source of support for their crops. Southern representatives, therefore, tend to fight against changes in the commodity title. They led the charge against eliminating direct payments for years, and oppose this payment change as well.

Looking over the list of conferees, many represent states focused on these commodity crops. On the House side, four hail from Texas (the number one producer of cotton in the nation), one from Georgia (where the two biggest crops are cotton and peanuts), two from Alabama (again cotton and peanuts), and one from Arkansas (rice and soybeans). On the Senate side, Georgia and Arkansas are represented, as are a few other Southern states.

So while this change is small in the grand scheme of the bill, and there are certainly bigger fish to fry (think the food stamps, sugar and dairy programs, to name just a few), it’s the kind of provision likely to be on the chopping block during heated negotiation.

Unfortunately, many of the individuals who would champion its removal are the same individuals claiming to fight for smaller government. The conferees should heed the advice of GAO, rather than their colleagues looking to protect the interests of “farmers” who don’t farm.


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