November 27, 2002

Dan McGlynn

Production, Emergencies and Compliance Division

USDA

Stop 0517

1400 Independence Avenue, SW

Washington, DC  20250-0517

Dear Mr. McGlynn,

The National Cattlemen’s Beef Association (NCBA) appreciates the opportunity to comment to USDA on the implementation of 2002 Farm Bill provisions. 

NCBA is pleased that USDA is considering, consistent with new farm bill statutes, an adjusted gross income standard for participation in farm programs.  The use of adjusted gross income (AGI) is more reflective of producer profitability than gross revenue.  It is also a readily definable term that is quickly found on producers’ Internal Revenue Service forms.   

NCBA notes that USDA has indicated certain programs to which the $2.5 million AGI standard shall apply.  NCBA recommends that this $2.5 million AGI be the standard for not only the federal farm programs and conservation programs, but also for drought relief and disaster programs like the Livestock Compensation Program, Livestock Assistance Program, Livestock Feed Program and other similar programs.

The current standard in place on the Livestock Compensation Program is $2.5 million gross revenue (receipts).  This means that many producers engaged in livestock production may exceed, due to the value of livestock, the $2.5 million in gross revenue, but simultaneously show net operating losses.  The use of gross revenue as the limiting factor for the LCP is grossly unfair.  If $2.5 million AGI, as defined in the Farm Bill and in these regulations, is a fair standard for farm and conservation programs, then AGI is a fair standard for use in drought and disaster programs.

Thank you for the opportunity to comment on this issue.  If you have additional questions, or if NCBA can provide additional information, please contact us 202-347-0228.

Sincerely,

Bryan Dierlam

Director, Legislative Affairs