Felix Revello: Industrial-scale farms hurt rural areas, taxpayers

The U.S. Department of Agriculture recently asked people to answer the seemingly simple question of who a “farmer” is. The question involves millions of dollars in payments to farms with extensive complex ownerships.

Congress directed the department to write a new definition in the 2014 Farm Bill. The purpose is to eliminate the government-subsidized competitive advantages of industrial-scale farms over family farms and related abuses of the farm safety net, which cost taxpayers billions of dollars.

How we answer this question determines the future of rural America.

Getting the answer right recognizes family farms both as a cherished American tradition and as small businesses supporting rural communities. When family farms give way to industrial-scale farms, rural communities depending on them fade away. As in a city, it is the difference between many small businesses and a few big box stores. Many family farms spread across the landscape create more jobs and wealth in rural areas than a few industrial-scale operations.

The main problem for Agriculture Department is determining who qualifies as a farmer by reforming the standards of who is “actively engaged in farming” to be eligible for farm payments. Industrial-scale farms are organized in highly complex structures with each of numerous partners (10 or more) ridiculously claiming that they are “actively managing” the farm to individually qualify for government handouts. Most partners live far from their holdings and don’t substantially participate in farming.

These operations receive hundreds of thousands of dollars in government payments, enabling them to buy inputs at bulk discounts that family-scale farms never get. Essentially, these big complex operations are organized to harvest government payments more than crops.

The Agriculture Department’s suggested reform of who is “actively engaged in farming” requires contributing “500 hours or 25 percent of their commensurate share of the total hours necessary to operate a farm of comparable size, using any combination of labor or active personal management” and “limits” payments for each person to a maximum of $125,000.

Industrial-scale farms could qualify for eight managers for a per farm limit of $1 million!

The Agriculture Department’s 500 hour/25 percent recommendation is reasonable because it enables family-scale farmers to qualify based on their contribution of hours to their farm while giving them time to work off-farm as so many must to supplement their total income needs. But, eight people at a government benefit of up to $125,000 maintains government-subsidized competitive advantages of mega-farms over family farms while bilking taxpayers of billions of dollars.

The department should limit each farm to two persons “actively engaged in farming” with strict guidelines preventing industrial-scale farms from merely dividing into smaller units on paper only to continue operating as one mega-farm using the same manager(s) and equipment. No person should qualify for payments under more than one farm.

Although the official comment period has closed, concerned citizens can ask their legislators to pressure Agriculture Department to write common sense guidelines focusing payments solely on family scale farms. Rebuilding rural America depends on getting this right.

This story was originally published October 25, 2015 at 10:00 AM with the headline "Felix Revello: Industrial-scale farms hurt rural areas, taxpayers."