Posted March 25, 2015
The U.S. Department of Agriculture (USDA) has announced a proposed rule to limit farm payments to non-farmers, consistent with requirements Congress mandated in the 2014 Farm Bill, according to the USDA press release available here. Farm Futures also published an article available here.
The proposed rule limits farm payments to individuals who may be designated as farm managers but are not actively engaged in farm management.
“We want to make sure that farm program payments are going to the farmers and farm families that they are intended to help. So we’ve taken the steps to do that, to the extent that the Farm Bill allows,” said Agriculture Secretary Tom Vilsack. “The Farm Bill gave USDA the authority to limit farm program payments to individuals who are not actively engaged in the management of the farming operation on non-family farms. This helps close a loophole that has been taken advantage of by some larger joint ventures and general partnerships.”
“Actively engaged” is defined for managers allows individuals with little to no contributions to critical farm management decisions to receive safety net payments if they are classified as farm managers. For some operations, there were an unlimited number of managers that could receive payments, according to Farm Futures.
Under the new proposed rule, non-family joint ventures and general partnerships must document that their managers are making significant contributions to the farming operation, 500 hours of management work per year, or 25% of the critical management time necessary for the success of the farming operation.
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, according to USDA.
Stakeholders interested in commenting on the proposed definition and changes are encouraged to provide written comments here by May 26, 2015. The proposed rule is available here.
For more information on farm bills, please visit the National Agricultural Law Center’s website here.