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Hobbyfarmer
Honored Advisor

Turning down the screws

USDA Implements 2014 Farm Bill Provision to Limit Payments to Non-Farmers

Department Proposes Changes to "Actively Engaged" Rule

The U.S. Department of Agriculture (USDA) today announced a proposed rule to limit farm payments to non-farmers, consistent with requirements Congress mandated in the 2014 Farm Bill. The proposed rule limits farm payments to individuals who may be designated as farm managers but are not actively engaged in farm management. In the Farm Bill, Congress gave USDA the authority to address this loophole for joint ventures and general partnerships, while exempting family farm operations from being impacted by the new rule USDA ultimately implements.

The current definition of "actively engaged" for managers, established in 1987, is broad, allowing individuals with little to no contributions to critical farm management decisions to receive safety-net payments if they are classified as farm managers, and for some operations there were an unlimited number of managers that could receive payments. 

The proposed rule seeks to close this loophole to the extent possible within the guidelines required by the 2014 Farm Bill. Under the proposed rule, non-family joint ventures and general partnerships must document that their managers are making significant contributions to the farming operation, defined as 500 hours of substantial management work per year, or 25 percent of the critical management time necessary for the success of the farming operation.  Many operations will be limited to only one manager who can receive a safety-net payment. Operators that can demonstrate they are large and complex could be allowed payments for up to three managers only if they can show all three are actively and substantially engaged in farm operations.  The changes specified in the rule would apply to payment eligibility for 2016 and subsequent crop years for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) Programs, loan deficiency payments and marketing loan gains realized via the Marketing Assistance Loan program.

As mandated by Congress, family farms will not be impacted. There will also be no change to existing rules for contributions to land, capital, equipment, or labor. Only non-family farm general partnerships or joint ventures comprised of more than one member will be impacted by this proposed rule.

Stakeholders interested in commenting on the proposed definition and changes are encouraged to provide written comments at www.regulations.gov by May 26, 2015. The proposed rule is available at http://go.usa.gov/3C6Kk.


Questions?
Please contact your local FSA Office.

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4 Replies
roarintiger1
Honored Advisor

Re: Turning down the screws

My only question is.....What the heck took them so long?

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northnd
Senior Contributor

Re: Turning down the screws

IMHO it definintely should happen, but never will happen.  Too many politicians and business moguls get a big slice of this pie and the moguls will not donate to a politician who votes for it and the politician will not vote for it and shoot themselves in the preveribial foot. 

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Blacksandfarmer
Veteran Advisor

Re: Turning down the screws

Its about time!

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timetippingpt
Honored Advisor

Re: Turning down the screws

Since there won't be any payments anyway, why would anyone care? IF they applied it to crop insurance along with a 40,000 per person cap in payments, then someone would care, but just for PLC and ARC? More paperwork for nothing.

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