§ Eliminates
Direct Payments, Counter-Cyclical Payments (CCP), Average Crop Revenue Election
(ACRE) payments and Supplemental Revenue Assistance Payments (SURE) as of the
end of the 2012 crop. Beginning with the 2013, all of these payments will
be eliminated. This creates $15 billion in savings for deficit reduction
over the five years of the Bill.
§ Payments
will be capped at $50,000 per person or entity.
§ Payments
will only go to farmers with an active stake in the farming operation.
§ A
new program called Ag Risk Coverage (ARC) will be implemented that will
complement current crop insurance programs. It will protect against both
yield and price losses. Farmers can make a one-time choice between
individual farm level coverage of county level coverage.
§ Payments
will only be available when actual losses are experienced off of a benchmark
revenue calculated using an Olympic average of the previous five crop years
(throwing away the high and the low). Payment rates depend on whether
individual or county coverage is elected and will only be paid on acres
planted.
§ Marketing
loans will still be available.
§ CRP
will be phased down from the current 32 million acres to 25 million acres
§ “Ends
Farm Payments to Millionaires”. This is the Senate’s heading on this part
of the Bill, but it actually refers to payments not being allowed if the total
AGI for the person or entity is $750,000 or more.
For farmers who are
enrolled in ag programs with the FSA, there are currently three different
levels of AGI (adjusted gross income) that affect whether they qualify to
receive any payments from the FSA during the year. These levels are:
§ $500,000
of non-farm income
§ $750,000
of farm income
§ $1,000,000
of non-farm income, but OK if 66.66% is from farm income
These levels were
implemented with the 2008 farm bill and we are just now starting to see
payments being disallowed. In some cases, the disallowance is due to
income earned before the farm bill was even implemented.
The Senate farm bill
passed last week contains a provision that will only disallow payments due to
AGI being more than $750,000 from all sources on a rolling three year
average. This provision will apply to 2013-2017 crops.
