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Bar crop subsidies to nonfarmers: House ag chief

Tue Dec 11, 2007 5:57pm EST

By Charles Abbott

WASHINGTON (Reuters) - Congress should "make a serious effort" to prevent federal farm subsidies from going to nonfarmers, the House Agriculture Committee chairman said in looking toward final adjustments in the new U.S. farm law.

Senators were to vote in coming days on two proposals to tighten farm subsidy rules. One would put a "hard" cap of $250,000 a year on payments per farm. The other would deny payments to people with an adjusted gross income above $750,000.

House Agriculture Committee chairman Collin Peterson has suggested a more sweeping step.

At a conference sponsored by Farm Journal magazine, the Minnesota Democrat said lawmakers should "make a serious effort to eliminate nonfarmers from farm payments."

To reach that point, Peterson said in a speech late on Monday, "one thing we're looking at" is whether the new farm law should spell out who qualifies as a farmer. Another step would be to change how the law defines a farm.

A spokeswoman said on Tuesday that further details were not available.

Peterson said he would present his ideas when House and Senate negotiators meet to write a final, compromise version of the five-year farm bill.

Subsidies are supposed to go only to people "actively engaged" in farming, but there are many complaints the term is poorly defined and laxly enforced. The Senate proposal for a "hard" cap on payments also would toughen the definition.

In February, the Agriculture Department reported there were 2.09 million U.S. farms. A farm is "any establishment from which $1,000 or more of agricultural products were sold or would normally be sold during the year."

Sixteen percent, or about 334,000 farms, have more than $100,000 a year in sales and account for 60 percent of the 932 million acres of farmland.

Peterson said there were only 350,000 commercial-size farms. He said many measurements of U.S. agriculture were skewed by the large number of farms that are part-time or hobby operations and not the owner's chief occupation.

"It's going to move a lot of land to cash rent" if nonfarmers cannot collect payments directly, Peterson said.

At the moment, people are considered engaged in farming if they provide land, equipment, capital, labor or management.

(Reporting by Charles Abbott; editing by Jim Marshall)