USDA Extends FSA Farm Changes

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) — Does USDA know if you are actively engaged yet?

The department announced Friday a 30-day extension for farmers to record their organizational structures with the Farm Service Agency to determine active engagement in farming.

The deadline has been extended to July 1 to complete restructuring or finalize any operational changes and determine how much interest a person has for farm programs. USDA set the extension at the request of farmers and ranchers who sought more time to comply with the rules.

"Most farming and ranching organizations have been able to comply with the actively engaged rule," Agriculture Secretary Tom Vilsack said. "This one-time extension should give producers who may still need to update their farm structure information the additional time to do so."

This issue is more critical for farmers in general partnerships and joint ventures under the department’s rules for active engagement under the 2014 farm bill.

The active-engagement rule does not apply to farm entities made up solely of family members. These family farm operations were exempted from the actively engaged requirement in the farm bill.

The rule also does not change existing regulations regarding the contributions of land, capital, equipment or labor, or the existing regulations related to landowners with a risk in the crop or to spouses.

The rule for active engagement finalized last year largely focuses on farm managers and others in general partnerships and joint ventures. The rule limits the number of farm managers who can receive payments under programs such as the Agricultural Risk Coverage (ARC-County) or Price Loss Coverage (PLC).

A general partnership or joint venture must be deemed "large" or "complex" to have more than one farm manager qualify for program payments. A farm must meet the rules for both size and complexity to qualify up to three farm managers for payments.

The rules were expected to affect about 3,200 general partnerships or joint ventures that had more people listed as farm managers than considered eligible under the rule. Those operations were likely to lose out on roughly $106 million in payments from 2016-18, according to USDA analysis of the rule last year.

The default for a "large farming operation" is a farm with more than 2,500 acres, though FSA has some range in acreage built in depending on the state and kind of crop or livestock. Regarding "complexity," a farm operation that seeks payments for multiple people based on complexity must make a request to the state Farm Service Agency committee. The diversification of the operation then becomes a factor in the FSA committee signing off on that request.

If a person is found ineligible, the overall operation could lose payment eligibility for up to $125,000. Each person in the operation must contribute management or labor to qualify, or risk losing that member’s share of the payment.

Farm managers must prove they contribute at least 500 hours of farm-management work per year or at least 25% of the time necessary to run the farm. And they must keep some sort of record book to show they are indeed doing the management or labor required. This new definition defines "active personal management" on the operation and only applies to farm managers on non-family farming operations seeking to qualify multiple people for program payments.

Chris Clayton can be reached at Chris.Clayton@dtn.com.

Follow him on Twitter @ChrisClaytonDTN

(CZ/SK)