Vilsack wll reopen payment-limit rule |

Vilsack wll reopen payment-limit rule

Jerry Hagstrom
DTN Political Correspondent

WASHINGTON (DTN) — In his first national news conference, Agriculture Secretary Tom Vilsack said Monday that President Barack Obama’s administration has decided to reverse two decisions former President George W. Bush’s administration made on agricultural policy in its last days in office.

Vilsack said the administration will reopen the public comment period on rules for payment limits on farm programs. The comment period that had been scheduled to end Jan. 28 would be extended for 60 days. Vilsack also withdrew a Bush administration plan to use $3.2 million from a fruit and vegetable block grant program, which would have shifted the money for enforcement of the mandatory country-of-origin labeling program for agricultural products.

By deciding to extend the comment period on the payment limits rule, the Obama administration has waded into one of the bitterest battles in agriculture. The 2008 farm bill stated USDA should tighten its rules on who is eligible for farm subsidies. The Bush administration issued an interim rule that applies to the 2009 crop year.

Major farm groups, including the American Farm Bureau Federation, the National Farmers Union and commodity groups, wrote Vilsack last week that the Bush administration’s definition of who is “actively engaged” in farm management — and therefore eligible for subsidies and other changes — went “beyond” congressional intent.

Two key Senate advocates for tighter limits, Sen. Byron Dorgan, D-N.D., and Sen. Charles Grassley, R-Iowa, also wrote Vilsack on Jan. 13 that the new rule “left open a glaring loophole that allows individuals to qualify as eligible payment recipients through vague and ambiguous criteria of management.”

Ferd Hoefner of the Sustainable Agriculture Coalition said today that the Bush rule only “nibbles around the edges” of making a meaningful change.

Vilsack also said one reason he was extending the comment period was because the agency has received only half a dozen comments on the payment rules. “The president has indicated he wants this government and this agency to be very transparent,” Vilsack noted.

Under the farm bill, the adjusted gross income limit was reduced from $2.5 million to a three-year average of $500,000 of non-farm income. After three years of non-farm income averaging above $500,000, a person or farm entity will no longer be eligible for commodity or disaster payments.

Farmers or farm entities must also have a three-year average adjusted-gross income of $750,000 or less in farm income to qualify for direct payments. Those producers who exceed the $750,000 would still be eligible for counter-cyclical and marketing-loan gains.

In the interim final rule, USDA also spelled out a new requirement that would prevent passive shareholders from collecting commodity or conservation payments.

When it comes to the decision on the fruit and vegetable block grants, the United Fresh Produce Association immediately issued a statement praising Vilsack.

“We are extremely pleased that Secretary Vilsack has made this decision and reversed what was simply bad public policy all the way around,” said Robert Guenther, senior vice president of United Fresh.

Fruits and vegetables are among the crops covered under the country-of-origin labeling law, but Guenther said, “It is incomprehensible that the previous leadership at USDA would place the entire burden of funding [country-of-origin labeling] enforcement on our sector, when [labeling] applies to meat and seafood as well.” Vilsack also noted Monday that the administration will review the entire country-of-origin labeling rule that is scheduled to go into effect on March 16.

Vilsack made it clear that the decision on the fruit and vegetable program was part of a signal that the Obama administration plans to promote good nutrition as part of health-care reform. The federal nutrition programs should both alleviate hunger and promote better health and nutrition, he said. Vilsack also said he considers increased spending for nutrition programs in the stimulus package to be a stimulus for agriculture and rural America. Every dollar in nutrition spending creates $1.73 in economic activity, he said.

Vilsack also said the basic goals for food safety should be decided before considering a merger of food safety agencies. He also said that in negotiating trade agreements, it’s important “we don’t sacrifice agriculture.”

Vilsack also said the Obama administration had urged Congress to include money in the stimulus package for updating the USDA computer system. Vilsack called the current USDA computer technology “very dated.” But he also cited the central problem with the USDA computer systems — that the 29 agencies within USDA have been allowed to make their own decisions on what technology to adopt. “One of the keys is to make sure we develop a consistent system so the secretary can send out one e-mail rather than multiple e-mails,” Vilsack said.

Critics have said, however, that the various divisions of USDA do not want a unified system because the use of many systems allows senior managers to develop power bases and make it very difficult to streamline management.

Vilsack added, “We need a web-based system that is easily accessible to farmers.” The system should improve service, collect accurate data and be more efficient, he said.

A new computer system would also be central to the future of USDA’s workforce, Vilsack said. He noted that 58 percent of USDA’s employees are 45 or older. Those employees’ expertise is “not easy to replace,” he noted.

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