Wednesday, July 18, 2007

Commodity Compromise Reached in House Ag Committee

A compromise was reached Wednesday on farm commodity payment reforms in the U.S. House Agriculture Committee.

The committee completed its work on the commodity title for the 2007 farm bill, and will continue debate on Thursday for other sections of the bill.

Rep. Leonard Boswell, who serves on the committee, told Iowa Independent via e-mail Wednesday that he is preparing for another big day ahead. "We are probably looking at a very late night tonight," he said.

The commodity title of the farm bill was one of the main points of contention, and took up much of the committee's time Wednesday. While many lawmakers had pushed for a cap of $200,000 in farm program payments per individual, Southern ag interests pushed back and forced a compromise approach.

The committee's compromise bans a farm operator from receiving payments if their gross adjusted income is over $1 million per year, reducing that threshold from the current level of $2.5 million.

The amendment also states that a farm operator who makes between $500,000 and $1 million in gross adjusted income is only eligible for payments if two-thirds or more of their income comes from farming.

One of the major loopholes in the current farm program was also eliminated, a loophole that allows operators of large farms to maximize commodity payments.
The so-called "Three-Entity Rule" loophole will be closed as a result of the committee's amendment.

The "Three-Entity Rule," under current law, allows a farm operator to receive farm program payments directly and indirectly through up to two other entities, such as partnerships and corporations. With this loophole, farm operators have been able to double their take.
The committee is expected to complete its work on the farm bill Thursday, and will send its bill to the full House for a vote.

The U.S. Senate Agriculture Committee is expected to begin the markup of its version of the farm bill in early August.

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