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2008 farm program payment limitation rulesThe American Society of Farm Managers and Rural Appraisers hosted a farm program webinar recently with veteran farm policy reporter and Agri-Pulse Editor Sara Wyant; Allen H. Olson, an agricultural lawyer with Moore, Clarke, DuVall & Rodgers in Albany, Ga.; and April Hall, an Agriculture Consultant with Kennedy and Coe in Kansas. According to panelists, the farm program payment limitation rules will not take effect until the 2009 crop year. However, producers need to be aware that changes are forthcoming and to review their entities soon to avoid any penalties or delays in USDA payments. Not all farmers will be affected, but under the new farm bill, restructuring the entity may allow some producers to recoup some or all of their previous benefits. "Compliance with USDA rules is a key objective," according to Allen Olson. "The greatest change is the elimination of the three entity rule which allowed an individual to double their payment eligibility." According to Olson, "Producers who have been relying on the three entity rule will probably need to restructure to be in compliance under the new law." "The rules are going to change so it would be helpful to have an expert review the status of your compliance," stated Olson. Another key change is the elimination of the Adjusted Gross Income rule, which could mean pushing individuals over the $750,000 farm income limit for any farmer selling land, whether or not the land was sold before the new rules were known. The AGI rule is based on the average for the past three years and CPA certification will be required because of the new farm bill. April Hall also points out, "Going forward, payments will be made to the entity, but attributed to the individuals for personal limitation purposes." Producers could benefit from seeking professional advice and having an expert review their operation to maximize their farm program dollars before the new bill goes into effect. "Improper estate/succession planning can result in stiff penalties and loss of USDA payments," Hall mentioned. "It is important to note that entity changes must be filed with your local FSA office and to also ensure beneficiaries are considered in any entity changes." For more information, you can visit Olson's law firm at http://mcdr-law.com/ or phone him at 229-888-3338. To contact April Hall, you can reach her at 785.889.3676 or at ahall@kcoe.com. ASFMRA was founded in 1929 and is the premier association for property economics professionals who provide management, consultation and valuation services on agricultural and rural assets. Society members manage over 40 percent of the absentee farmland in the country; provide approximately 175,000 appraisals a year on 30 million acres of land and provide consulting services for over 5,500 clients who collectively represent over 7 million acres of rural real estate. 8/4/08 Date: 7/30/08
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