USDA Releases Proposed Rule Regarding ‘Actively Engaged’ Farmers

The U.S. Department of Agriculture has released the proposed rule to limit farm payments made to non-farmers. The proposed rule limits farm payments to individuals who may be designated as farm managers - but are not actively engaged in farm management. The current definition of actively engaged for managers was established in 1987 and allows individuals with little to no contributions to critical farm management decisions to receive safety net payments. The proposed rule would require non-family joint ventures and general partnerships to document that their managers make significant contributions to the farming operation - which is defined as 500-hours of substantial management work per year - or 25-percent of the critical management time necessary for the success of the operation. Only one manager could receive a payment - unless the operators could demonstrate they are large and complex - in which case up to three managers could receive payments as long as they can prove they all are actively and substantially engaged in farm operations. These changes would apply to eligibility for 2016 and subsequent crop years for ARC and PLC programs, loan deficiency payments and marketing loan gains through the Marketing Assistance Loan Program.

Iowa Senator Chuck Grassley says the proposed rule is not as stringent as the farm bill amendment he authored that was approved by majority votes in both bodies of Congress - but it is a small step in the right direction. Grassley says there need to be programs that are defensible to the American taxpayer and do not put young and beginning farmers at a disadvantage. He says he will be looking at ways to continue to improve the definition of actively engaged until he is satisfied farm subsidies are only going to people who are actually farming or qualify by owning land which is already allowed under current law. Written comments may be submitted by May 26th at Regulations dot gov (www.regulations.gov).