Could cut many from programs: USDA to re-define family farm

Congressman Marion Berry says he has “heartburn” — and it's not the spices. A couple of issues are pressing the northeast Arkansas Democrat, and they may soon have producers reaching for the antacid, too.

The first is an attempt by USDA administrators to redefine the family farm in a way that could leave a number of producers out in the cold when it comes to participating in some federal farm programs.

Under the definition proposed by USDA, a farming operation could not exceed $750,000 in annual gross farm income and still be considered a “family farm” and remain eligible for direct and guaranteed loan program or other forms of Farm Service Agency assistance.

A Federal Register notice published by USDA in February says farms could not exceed the greater of $750,000 or “95 percent of the statistical distribution of the income of farms in the state with gross sales in excess of $10,000.” (Analysts say the latter would establish a de facto limit of $750,000 in many states.)

“We're preparing to resist this rule and get it stopped,” he says. “This is an attempt to circumvent the intentions of the Congress and make people ineligible for benefits under the farm programs — direct and guaranteed loans,” Berry said in an interview.

“Basically, it would means-test and disqualify larger farmers. This would adversely affect Mid-South farms — we'd be disproportionately hit by this. This is just another attempt by the (Bush) administration to dismantle and means-test farm programs.”

To stop the rule change, producers need to get in touch with their Congressional delegation immediately, says Berry. A rule change must be published in the Federal Register for 90 days before Congress deals with its comment. The proposed changes were published on Feb. 9.

“We have only a couple of weeks before this becomes a rule,” says Berry.

Berry says other farm-state congressmen have begun working to block the implementation of the rules change. “You should have started seeing some press releases and serious action the first week of May.”

A group of farm organizations, including the National Cotton Council, the USA Rice Federation and the U.S. Rice Producers Association, have also written USDA's Farm Service Agency to express their opposition to the proposed rule.

“We do not believe that the proposed definition adds any clarity to the question of what is a family farm and would unnecessarily exclude legitimate family farmers from access to capital,” said the letter signed by 15 farm organizations and the American Bankers Association, the Independent Community Bankers Association and the Farm Credit Council.

“We also are greatly concerned that while this rule only affects farm lending programs, it could easily serve as a precedent for possible future income caps on other USDA farm programs.”

The second “outrage” that has Berry's teeth on edge is the recent preliminary ruling by the World Trade Organization on American cotton subsidies. Many economists say the WTO ruling (which reportedly favors a complaint filed by the government of Brazil against the U.S. cotton program) will shortly mean complaints on subsidies for other crops.

“All of us from the Mid-South and the cotton-producing areas are upset about it,” says Berry. “I think the ruling was made in error. We wrote the 2002 farm bill with the assurances that it was GATT-legal. I don't know how they've found it wasn't. The entire last farm bill was considered to be in compliance with (trade treaties). We looked at that very carefully.”

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