USDA Proposes It Takes 500 Hours to be "Actively Engaged"

Mar 24, 2015
WASHINGTON, DC -- The U.S. Department of Agriculture (USDA) today announced a proposed rule to limit farm payments 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.
 
In the Farm Bill, Congress gave USDA the authority to address this situation for joint ventures and general partnerships, while exempting family farm operations from being impacted by the new rule.
 
"We're going to carefully unpack this draft rule to figure out how it impacts the rice industry," said Ben Mosely, USA Rice's vice president of government affairs.  "We'll be looking at unintended consequences of the rule, and in particular to see if a one-size fits all approach here will work."
 
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.
 
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 by May 26, 2015.  The proposed rule is available at http://go.usa.gov/3C6Kk.
 
Contact:  Deborah Willenborg (703) 236-1444