"Actively engaged in farming" redefined

Farm and Ranch January 6, 2010 USDA’s Farm Service Agency has amended the rules on the definition of “actively engaged in farming.” The rules apply to eligibility for payments under the Direct and Counter-cyclical Program or the Average Crop Revenue Election, ACRE program. FSA Administrator Jonathan Coppess says USDA had received comments from producers that previous regulations were not workable and had negative impacts on small farms.

Coppess: “And so we just clarified that and modified a little bit. For example, if all direct payments received, directly or indirectly, by an operation and none of the payments received exceed $40,000, it allows those individuals, those operations, to be actively engaged so long as half of the interest in the entity is held by those actually providing labor or management.”

Coppess provides an example of how the redefinition will help loosen restrictions on small farmers.

Coppess: “Lets say a retired farmer owns 40% of a corporation that rents land. And his two sons each own 30% of the corporation. The two sons collectively provide significant contributions of labor or management. But neither the father or the sons have any other farming interests. The corporation is eligible to receive full payment even though the retired farmer does not contribute any active personal labor or management to the farming operation.”

That is so long as they don’t collectively reach over 40-thousand dollars in program payments.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.