Report of the Payment Limit Commission Keith Collins. Commission’s Statutory Charge. Assess effects of further limitations for direct, counter-cyclical payments and marketing loan benefits on: Farm income Farm land values Rural communities and agribusiness infrastructure
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“Examine the feasibility of improving the application and effectiveness of payment limitation requirements, including the use of commodity certificates and the unlimited forfeiture of loan collateral.”
--Gary Black (Georgia); Gary Dyer (Arizona);
Richard Newman (Texas)
--Terry Ferguson (Illinois); Ellen Linderman (North Dakota);
Neil Harl (Iowa)
--Alice Devine (Kansas); William Spight (Mississippi);
Ed Smith (Texas)
--375 comments received
--9 invited speakers and several members of the public
--From January-August, 9 meetings held in which several experts were invited to provide information
Producer has own operation, 50% interest in trust A and 50% interest in corporation B
Own farm 40,000 65,000 75,000
A 20,000 32,500 37,500
Total 80,000 130,000 150,000
Grand total $360,000
Land, equipment or operating capital
Active personal labor or active personalmanagement
Farm typePayments per farm*
Cash grain $31,900
Other crops $12,100
*For farms receiving government payments. About 20% of other crop and 40% of livestock farms received government payments in 2001.
Amount not paid
out due to limits
Crop % Reduction
FSA Farms1.6 mil. 198,890 19,222 2,289 325
Direct payments fall $255-275 mil.
CC payments fall $400-425 mil.
Loan benefits fall $400-500 mil.
Ariz. & Calif: 25% or more of producers would reach limit
--Delay change until next farm bill or allow adequate phase-in time
--Increase compliance resources at FSA/OIG
--Avoid incentives to create business organizations for payment purposes
--Avoid changes that force risk shifting from landlord to tenant
--Changes should be meaningful, transparent and simple and sensitive to commodities, regions, existing infrastructure
--Information and analysis