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Johanns Proposes Income Test For Program Payments


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In his appearance before the National Cattlemen's Beef Association last week, USDA Secretary Mike Johanns said the administration wants to lower the adjusted gross income (AGI) limit for commodity program payments from the current $2 million to $200,000. It's among a number of items, which also includes elimination of the three-entity rule, and placing a cap of $360,000 on the amount of payments that can be received by an individual farmer or farmer and his spouse. The new rules would produce savings of $1.5 billion.

How many might be affected by a $200,000 adjusted gross income cap is subject to speculation, writes Forrest Laws of Delta Farm Press, but most farmers oppose "means" testing because they might reach that level some day. Johanns later told reporters USDA estimates 80,000 farmers would exceed the $200,000 AGI level.

"Currently, only 2.3% of Americans who file tax returns earn an AGI of more than $200,000," Johanns said. "That means that 97% of all taxpayers earn less than that amount. We think this would become a simple, straightforward way to deal with payment limits."

-- Joe Roybal

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