Grassley on Payment Limits [Updated]

Sen. Grassley disagrees with gross income, wants LDP's included in caps (hat tip, Brownfields)--from a conference call:

"Do you support his budget proposal to eliminate direct payments to any farm with more than $500,000 in gross revenue?
GRASSLEY: The answer is no. But for those of you that have followed me for the last several years, you know I am for great and restrictive limits on how much one operation can get. That's best expressed through the $250,000 hard cap that I've put in place. And, of course, he does have that in his program.

So from that standpoint, he and I are on the same page. We're not off the page. I'm not off the page with him on the $500,000, but it can't be on gross income. It's got to be on net income for farmers or let's say adjusted grow income for farmers because sales do not make a determination of whether or not you're making a profit or not.

So it's got to be related to capability of paying. So that would be one change I would make. Now, here's another consideration that goes beyond just a cap. And that is direct payment or include all payments. I would be one to include all payments. That's why my way of $250,000 is a better way of doing it because it -- a direct payment dollar, an LTP dollar, a countercyclical dollar, they all look the same. So you should have all of them included. And then you want to remember that some of this eventually has to be taken into consideration with our WTO and our negotiations. We want market opening. We get market opening. We're willing to change our subsidies that are trade distorting.

Direct payments and conservation and maybe some others are not trade distorting. LDPs and countercyclicals are a trade distorting. Maybe countercyclicals a little less trade distorting than LDPs. "