Letter to the Honorable David M. Walker
March 4, 2003
The Honorable David M. Walker
Comptroller General, U.S. General Accounting Office
441 G Street, NW
Washington, DC 20548
Dear Mr. Walker:
I am writing to request an analysis of the implementation and current application of the Farm Program Payments Integrity Act of 1987.
In the 1987 Act, Congress created the three entity rule and tightened rules requiring farm program recipients to be actively engaged in farming. That was aimed in part at ending abuses such as the widely publicized "Mississippi Christmas tree" - where one farm was subdivided into many corporations each receiving payments up to the established limit.
However, recent press accounts call into question how effectively the 1987 Act is being implemented. For example, Tyler Farms reportedly received $38 million between 1996 and 2001 on a 61,000 acre spread owned by the Griffin family of Phillips County Arkansas. Griffin reportedly leases the land to Tyler Farms, which is a complex partnership involving 39 local investors who in turn have 66 separate corporations to maximize government payments (John Lancaster, "More Subsidy Money Going to Fewer Farms, "The Washington Post", January 24, 2002).
General partnerships may receive unlimited payments if each partner is actively engaged in farming and no partner receives payments in excess of the established limits.
This arrangement and others like it raise questions about the interpretation and enforcement of the 1987 Act's requirement that each partner be actively engaged in farming. Specifically, what standards are being applied to determine whether a significant contribution of active personal labor, active personal management or a combination of the two is being provided by the payment recipient? Do these standards reflect the intent of Congress in passing the 1987 Act? If the current standards do not represent the intent of Congress, what reform is necessary?
Thank you for your time and consideration.
Sincerely,
Chuck Grassley
United States Senator