Payment Limitation--Paper Entities

A recent case:

The owners of a central Illinois farming business that will pay $5.3 million to settle allegations it faked partnerships to avoid limits on subsidies say they did nothing wrong.

The U.S. Department of Justice on Wednesday said Dowson Farms of Divernon agreed to the settlement. The department accused three of the owners of creating fake partnerships in the names of employees between 2002 and 2008 to bypass caps on subsidies. The three didn’t admit any wrongdoing.

Read more: http://www.sj-r.com/article/20140130/NEWS/140139902#ixzz2s5rq0FYo

Where Do Farmers Come From?

Seems to me that the conventional wisdom is that farmers inherit, that the son (almost always the son) inherits the farm and that's where farmers come from.  I say "conventional wisdom" although I really mean the presumption in history.  Once it was true, of course.  If 90-95 percent of the population is farmers, as in colonial America, then inheritance is the logical answer.

The economists had the concept of the "agricultural ladder", where a man worked his way up from day labor to sharecropper to renter to owner.  That may have worked in the 19th century, but I think maybe its prevalence is overestimated.  In the case of my family, my paternal great grandfather, my maternal grandfather, and my father all moved onto farms aided by money from other occupations or sources (preaching, carpentry, and family, respectively).  That's a small sample but it's easy for historians to overlook, because there's no statistics to prove or disprove this.

Today it seems that there's a reasonable flow of people from other occupations into agriculture, particularly the "food movement" end of agriculture: the organic farmers, the community-supported agriculture, the niche products of wine, goat cheese, semi-exotic crops.

This interview with an organic farmer in Grist is interesting, covering many aspects of modern food movement farming.  Implicitly it's directed towards people coming to farming, not inheriting farming.  There was also a recent article in the NYTimes on the graying of the organic movement, which made the point that children of some people who came to organic in the 60's and 70's had no interest in continuing on their parents path.

Blanket Receipt Requirement

Sec. 12204 of the farm bill (page 895) removes the requirement that the producer ask for a receipt, so now FSA, NRCS, and RD must issue a receipt for all requests for service..

Jon Meacham Doesn't Know History?

I might as well jump on the bandwagon along with Matt Yglesias and Josh Marshall.  Meacham, who writes nicely, was apparently on Morning Joe and said something to the effect that Lincoln and FDR didn't use executive orders.  Matt and Josh raise some of the obvious points, the Emancipation Proclamation and going off gold.

I've been doing a little reading in the organizational history of USDA, and in the 30's FDR created and moved SCS and Resettlement Administration (forerunner of FmHA) around via EO's.  I don't know why, but the pattern seemed to be that Roosevelt would act, then Congress would legislate.

(I suspect Meacham phrased his point poorly--that he meant that promising to lead by issuing EO's isn't very appealing.  But FDR did promise "action" in his inaugural.)

The Crystal Clarity of Congress

I love this bit buried in the farm bill: (page 145)

"PAPERWORK REDUCTION
.—In order to conserve Federal resources and prevent unnecessary paperwork burdens, the Secretary shall ensure that any additional paperwork required as a result of the regulations promulgated pursuant to subsection (a) be limited to those persons who are subject to such regulations.

 We're talking here about payment limitation and the actively engaged determination.  Either the language is meaningless, because every potential recipient of payments is "subject to" the regulations; or it's an attempt to say you can only require people who might make over the limitation to fill out any forms.  But how do you know who they are unless you collect the information?

(Similar issue arose with payment limitation back in the mid-80's.)

"Freedom to Farm"--RIP

Some 18 years after it was enacted, it looks as if Pat Roberts' "Freedom to Farm" will shortly be dead and buried.

Good riddance, IMHO.  I think I've always been of the opinion that it (the idea of phasing out payments) wasn't going to work and particularly it wasn't going to work the way Roberts drafted the provisions.  If you're going to phase out payments, your law needs to cover the whole process, taking the payments down to zero.  (Somewhat like the tobacco termination payments did.)  Instead they just had small reductions over a period of 5 years.  It was like a 2-pack a day smoker saying that he'd quit smoking by reducing from 40 cigarettes a day down to 35, and then he'd quit.

The Farm Bill Draws Nigh

Reports are that the farm bill will hit the House floor today. But EWG has an ominous post about the possibility that some provisions will run afoul of the WTO.

How Many Square Feet for a Company

Under one.

From a Times post on Chinese internet problems:

A simple Google search reveals that the address on Thomes Avenue in Cheyenne [to which Chinese web traffic was redirected] is not a corporate headquarters, but a 1,700-square-foot brick house with a manicured lawn.

That address — which is home to some 2,000 companies on paper — was the subject of a lengthy 2011 Reuters investigation that found that among the entities registered to the address were a shell company controlled by a jailed former Ukraine prime minister; the owner of a company charged with helping online poker operators evade an Internet gambling ban; and one entity that was banned from government contracts after selling counterfeit truck parts to the Pentagon.

I'm probably a reactionary but sometimes I get fed up with "entities" which don't do anything for society.

Identifying Discrimination in USDA Activities

USDA has published a notice of proposed rulemaking on nondiscrimination.  There's several changes, among them expanding the basis for political beliefs and gender identity.  I won't comment on that, but I will on requiring agencies to collect race, ethnicity and gender data on their customers, albeit on a voluntary basis.

I'm not sure how that works.  John Jones comes in and applies for a farm loan. He refuses to give his REG data.  He is turned down.  He appeals on the basis of REG.  Can the agency say we didn't know you were REG, so our basis for turning you down was totally rational and legal?  Can Jones say: look at me, it's obvious that I'm REG and you approved a loan in a very similar case to Sandra Smith, who wasn't REG?  And the agency says, but Sandra didn't provide REG data, so we approved her on a totally rational and legal basis?  Can the agency say only if you provide REG data can you appeal any rejection on the basis of REG?

My bottomline: I don't see how this approach to the REG data helps in the decision making and appeals process.

Grassley and Delegation of Authority

From Chris Clayton at DTN:

"Discussing the farm bill, Grassley said the principal negotiators may take his language defining an actively engaged farmer out of the farm bill and leave it up to USDA to determine who is actively engaged. This Congress is filled with lawmakers who have criticized administrative rulemaking usurping congressional authority. Yet, farm-bill conferees now seem intent on turning over rulemaking to USDA to redefine who is actively engaged as a farmer.

"The people who want to shovel this off to the administration for rulemaking, they don't want anything," Grassley said. "They want to take it out. If they could get away with taking it out, they would just take it out ... They think they can accomplish the same thing by giving to the department and the department might not do anything very significant."

Grassley's actively engaged rule only allows one person designated as the farm manager. He noted the Government Accountability Office has cited instances of 16 people classified as "managers" for a single farm entity.

Grassley reiterated there was no need to change anything in the payment-limit provisions because they were the same in both the House and Senate bills."

 I don't trust my memory because I tried and failed to find documents supporting the following: when "actively engaged" first became law, ASCS wrote regulations implementing the provision.  But I believe that the powers that be in Congress (Jamie Whitten perhaps, as he was head of House Ag and represented MS) got ASCS to back off a bit.  Don't know whether that was a provision in another law or just pressure on the USDA hierarchy.  Anyway, I'm sure FSA is looking forward to having this responsibility once again.  I'm sure.