USDA recently invited citizens to answer the seemingly simple question of who a “farmer” is. But, the question becomes very complicated when it involves millions in payments to farms with extensive complex ownerships. Congress directed the USDA to write a new definition in the 2014 Farm Bill to eliminate the government-subsidized competitive advantages of industrial-scale farms over family farms and related abuses of the farm safety net costing taxpayers billions.
How we answer this question determines the future of rural America... Getting the answer right recognizes that family farms are both a cherished American tradition and small businesses supporting rural communities. When family farms give way to industrial-scale farms, rural communities depending on them fade away. As in a city, it is the difference between many small businesses and a few big box stores; many family farms spread across the landscape create more jobs and wealth in rural communities than a few industrial-scale operations.
The main problem for USDA is determining who qualifies as a farmer by reforming the standards of who is “actively engaged in farming” to be eligible for farm payments. Industrial-scale farms are organized in highly complex structures with each of numerous partners (10 or more) fraudulently claiming they are “actively managing” the farm to multiply the persons qualifying for government handouts. Most live far from their holdings and don’t substantially participate in farming. These operations receive hundreds of thousands in government payments enabling them to buy inputs at bulk discounts family scale farms never get. Essentially, these big complex operations are organized to harvest government payments more than crops.
USDA’s suggested reform of who is “actively engaged in farming” requires contributing “500 hours or 25 percent of their commensurate share of the total hours necessary to operate a farm of comparable size, using any combination of labor or active personal management” and “limits” payments for each person to a maximum of $125,000. Industrial-scale farms could qualify for eight managers for a per farm limit of $1 million!
The USDA’s 500 hour/25% recommendation is reasonable because it enables family scale farmers to qualify based on their contribution of hours to their farm while giving them time to work off-farm as so many must to supplement their total income needs. But, eight people at a government benefit of up to $125,000 maintains government-subsidized competitive advantages of mega farms over family farms while bilking taxpayers billions.
The USDA should limit each farm to two persons “actively engaged in farming” with strict guidelines preventing industrial-scale farms from merely dividing into smaller units on paper only to continue operating as one mega farm using the same manager(s) and equipment. No person should qualify for payments under more than one farm.
USDA asks if the revised definition should also apply to family-owned farms. Of course it should because non-family industrial scale farms will nominally replace partners with family members to evade limits. Family size isn’t reasonable for determining how much taxpayer support a farm receives anyway.
Although the official comment period has closed, concerned citizens can ask their legislators to pressure USDA to write commonsense guidelines focusing payments solely on family scale farms. The millions saved could be used for beginning farmer programs and other development initiatives strengthening existing family farms and our rural communities. Rebuilding rural America depends on getting this right.