The recent budget reconciliation bill has raised significant concerns regarding federal policy’s impact on family farms. In an analysis published on July 17, 2023, Jonathan Coppess, an associate professor of law and policy at the University of Illinois, questioned why federal legislation appears to favor legal entities over individual family farms. This inquiry centers on a provision known as “Section 10306,” which modifies the payment limit provisions of the longstanding 1985 Farm Bill.
While the term “Section 10306” may sound innocuous, the implications are far-reaching. The amendment expands exemptions for joint ventures and general partnerships, allowing certain farms to capitalize on federal programs rather than focusing solely on agricultural production. Coppess underscores that this provision is less about farming crops and more about “farming the federal programs and public till.”
Coppess, who previously served as chief counsel for the Senate Agriculture Committee, highlights the loopholes created by the new legislation. For instance, a farm structured with three layers of legal entities could qualify for federal payments totaling up to $1.24 million annually. By employing creative legal and accounting strategies, individuals involved could potentially increase this limit to $2.5 million or more. This development signals a troubling trend where some operations could effectively bypass any cap on federal funds received, ultimately leading to larger, more consolidated enterprises at the expense of traditional family farms.
The professor emphasizes the lack of requirements associated with federal farm payments; farmers do not need to demonstrate a loss in crop yield or even prove that the crops for which they are receiving payments were actually planted. As a result, these funds could be used to inflate cash rents and land prices, disadvantaging neighboring farmers who do not engage with these newly established entities.
Coppess describes this change as a “stunning” shift in federal law, particularly given that it coincides with nearly $200 billion in cuts to food assistance programs for low-income households. He notes that while “qualified pass-through entities” gain easier access to federal payments, low-income individuals face increased paperwork burdens and potential loss of assistance.
In his critique, Coppess argues that the reconciliation process is likely to exacerbate national debt without achieving budgetary discipline, contributing to policies that are detrimental to those who ultimately fund these programs. He paints a vivid picture: a mother in a small town battling bureaucracy for food assistance while a farm entity manager drives by in a new pickup truck, en route to adjust legal structures for maximizing federal payments.
The implications of these changes are profound. Coppess warns that the current trajectory may spell the end for what remains of traditional family farming, emphasizing the urgent need for policy reform that prioritizes the needs of individual farmers over legal entities. As these new realities unfold, the struggle between family farms and larger agricultural businesses may redefine the landscape of American agriculture.