Chuck Abbott at Reuters is reporting just now that key farm bill conferees moved tonight in the White House's direction on some issues, such as lowering the adjusted gross income limit for subsidy eligibility. How far we don't know. One rumor is that anyone with an AGI above $500,000 three years running, regardless of source, would be disqualified from farm subsidy programs. Until today, we've heard that the conference leaders were settling on a $500,000 AGI limit, but that it would only disqualify part time farmers or non-farm income.

House Agriculture Committee Chairman Peterson recently has been quoted as saying full-time farmers should not be affected by AGI limits because Congress shouldn't be dictating limits on farm size. Unless it comes to dictating when a farm is too small to be a farm. Chairman Peterson has proposed to cut off subsidies to small farms of 20 acres or less. In fact, he doesn't think farms that small should even be counted in the Census of Agriculture.

We think means testing makes enormous sense for farm subsidy programs. The current level--$2.5 million AGI unless you're a full-time farmer--is a joke, as were the only moderately less risible variations that passed the House and Senate last year.

But even the original AGI proposed by the administration (hard cap of $200,000 average over three years regardless of income source), which we strongly supported, needed to be combined with much lower caps on payments regardless of income, a la Dorgan-Grassley, which we also strongly supported. Both would have to be well-constructed and rigorously enforced to produce the results we need. But to our mind that was the reform package we needed in this cycle. It was in the Kind-Flake proposal defeated on the House floor. The subsidy lobby has fought hard against both ideas.

We'll know a lot more about this tomorrow, finally, I expect.