Concerns are rising regarding recent amendments to federal farming policy that appear to prioritize large legal entities over individual family farms. Jonathan Coppess, an associate professor of law and policy at the University of Illinois, raised these issues in a critical analysis published on July 17, 2023, through farmdocDAILY. His examination focuses on “Section 10306,” a component of the recently passed budget reconciliation bill that modifies payment limit provisions established in the 1985 Farm Bill.
The amendments associated with Section 10306 are not as innocuous as they may seem. While the section is described as “boring and benign,” it effectively expands exemptions for joint ventures and general partnerships, creating significant loopholes for financial gain. Coppess argues that this change facilitates the exploitation of federal programs rather than supporting traditional farming practices.
Coppess, who previously served as chief counsel of the Senate Agriculture Committee and at the U.S. Department of Agriculture (USDA), elaborates on the implications of this policy shift. He notes that the new loopholes allow legal entities operating as farms to receive additional payments without any substantial constraints. For instance, he provides a scenario where a farm could establish three layers of legal entities to potentially secure an annual payment limit of $1.24 million. With further legal and accounting strategies, this amount could escalate to $2.5 million or more.
In his analysis, Coppess highlights that these changes enable certain farm operations to circumvent limits on federal funds, promoting further consolidation of agricultural resources at taxpayer expense. He emphasizes the troubling nature of these payments, noting that they come without any requirement for farmers to demonstrate actual losses in crop production.
Moreover, the federal farm payments are characterized as free to farmers with base acres. The absence of stipulations requiring work or losses for these funds mirrors other federal assistance programs, allowing recipients to allocate the payments for various purposes, including higher cash rents and land prices. This situation could disadvantage neighboring farmers who do not benefit from these legal structures.
Coppess labels this legislative alteration as a “stunning change to federal law,” especially given its juxtaposition with nearly $200 billion in cuts to food assistance programs for low-income households. He states, “Qualified pass-through entities get an easy button for more federal payments while low-income individuals get more paperwork burdens and requirements or lose assistance.”
The implications of these policy changes extend beyond financial concerns. Coppess paints a vivid picture of the contrasting realities faced by individuals in rural communities. He describes a scenario where a mother struggles with paperwork to secure food assistance for her children while a manager of a farm entity drives by in a new pickup truck, intent on maximizing federal payments through legal loopholes.
As federal policies evolve, experts like Coppess warn that these changes could spell the end of the traditional family farm. He argues that the reconciliation process, rather than enforcing fiscal discipline, risks adding trillions to the national debt while delivering policies that disproportionately benefit large farming entities.
In light of these developments, the agricultural community and policymakers face critical questions about the future of family farms and the integrity of federal agricultural support.
