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Historical Background on Payment Limitations

Historical Background on Payment Limitations. Edward G. Smith Associate Director for Agriculture & Natural Resources Texas Cooperative Extension National Public Policy Education Conference Salt Lake City, Utah September 22, 2003. Presentation Outline. Brief History of Payment Limitations

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Historical Background on Payment Limitations

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  1. Historical Background on Payment Limitations Edward G. Smith Associate Director for Agriculture & Natural Resources Texas Cooperative Extension National Public Policy Education Conference Salt Lake City, Utah September 22, 2003

  2. Presentation Outline • Brief History of Payment Limitations • Goals of Farm Programs • Goals Advanced for Payment Limitations

  3. Brief History of Payment Limitations • Payment limit debate began in late 1960s • Limits first enacted in 1970 farm bill at $55,000 • 1973 farm bill lowered to $20,000 • 1977 farm bill increased to $40,000 • 1985 farm bill raised to $50,000 per “person” • Initiated 3 entity rule • 1990 farm bill established separate limits of $50,000for deficiency payments, $75,000 for MLG & LDP • Total limit $250,000

  4. Brief History (Continued) • 1996 farm bill set AMTA limit at $40,000 and MLG/LDP at $75,000 • 1999-2001 increased MLG/LDP limit to $150,000 • 2002 farm bill set direct payment limit at $40,000, CCP at $65,000, and MLG/LDP at $75,000 • Introduced means testing for first time • $2.5 million AGI limitation (3 year avg) unless 75% came from Ag. • Peanuts subject to separate limit • Maintained 3 entity rule

  5. Goals of Farm Programs • Foster an abundant supply of food and fiber • Support and stabilize farm income • Help producers get access to credit • Expand agricultural exports • Conserve natural resources • Maintain the family farm and the vitality of rural communities • Capitalize on the multiple functions of agriculture • Counter the protection provided to agriculture in other countries

  6. Goals Advanced for Payment Limitations • Reduce government spending • Prevent large operators from receiving excessive support • Prevent wealthy non-producers from receiving payments • Slow down farm consolidation and the bidding up of land values • Redistribute agricultural program spending

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