The majority of federal farm subsidies already go to the wealthiest farmers: The top 10 percent of recipients received 77 percent of subsidies between 1995 and 2016. But a provision in the House Agriculture Committee’s proposed farm bill would make it even easier for millionaire farmers to receive subsidies.
The 2014 Farm Bill established an income limit so that any farmer who makes at least $900,000 a year in adjusted gross income, or $1.8 million for a couple, could not receive farm subsidies through the Agriculture Risk Coverage or Price Loss Coverage Programs. But the proposed bill completely exempts all “pass-through entities” from this income limit. Pass-through entities include partnerships, joint ventures and limited liability corporations, among other businesses.
This huge loophole allows anyone with a farm or farm partnership and an annual income above the $900,000 limit to reorganize as a pass-through entity, and then become eligible for subsidies, essentially rendering the income cap useless for farm businesses.
The 2014 Farm Bill also established a $125,000 per person-per year payment limit for these farm subsidies. But the proposed bill exempts pass-through entities from the payment limit, so that these entities could essentially receive unlimited subsidies every year.
The new bill also loosens restrictions for family farms. Previously, the children, siblings and spouse of a farmer could also receive subsidies. But the bill adds cousins, nieces and nephews to the list of family members who can get up to $125,000 a year. And because of lax eligibility rules, these passive family members don’t have to lift a finger on the farm to receive a payment.
Instead of taking this opportunity to tighten the subsidy loopholes that were established in the 2014 Farm Bill, the House Agriculture Committee’s bill only creates more loopholes. These loopholes will further concentrate farm subsidies to the wealthiest and most successful farms, instead of helping the farmers who actually need them.