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Are you 'actively engaged' to qualify for farm payments?

By Sara Wyant

If you live thousands of miles away from a farm you have never visited—but you help make marketing and management decisions—should you still be eligible for farm program payments?

That’s just one of several eligibility questions farm bill negotiators will need to decide as they work on finalizing a new farm bill.

To be actively engaged in farming under the current farm bill, an individual is required to make significant contributions to that operation in personal labor or active personal management (or both). However, the definition of active personal management in Farm Service Agency regulations is fairly broad and can be satisfied by an individual performing at least one of eight services representing categories such as supervision of activities, according to the Government Accountability Office.

Last month, Sen. Chuck Grassley, R-IA, released a new GAO report that recommended changes to the eligibility requirements for being “actively involved” in farming.

“This is just one more reason that my payment limits provisions included in the Senate and House bills—placing a hard cap on farm payments and closing loopholes that allow non-farmers to game the system—should stay untouched,” Grassley said.

An identical measure in the House farm bill, proposed by Rep. Jeff Fortenberry, R-NE, attempts to prevent the farm payment mistakes identified by GAO.

The new provision erases “active personal management” from the definition of “actively engaged” in farming. The new definition only allows for one manager to qualify.

According a Congressional Research Service report comparing the House and Senate farm bills, the adjustment “effectively requires personal labor in the farming operation to be considered actively engaged. Members of legal entities collectively would need to make a significant contribution of personal labor.”

It adds a special class of “farm managers” that may be considered actively engaged by providing management but not personal labor. However, a farm manager must be the only person to qualify at an operation, may qualify at only one operation and must manage an operation that doesn’t share resources with another that collectively receives more than the payment limitations.

But some farmers complain that the more restrictive definition would not be workable.

Bill Bridgforth, an agricultural and environmental law specialist in Pine Bluff, Ark., said any “reasonably sized” operation would have more than one manager.

“In reality, the people who are taking the risk, buying equipment, etc.—those that are making agriculture work—are those who are generally providing management and very little labor,” Bridgforth said.

Particularly with today’s technological advancements, the high cost of equipment and reductions in labor, Bridgforth said only allowing one manager to qualify does not meet the needs of modern farming.

Arkansas Farm Bureau member Dow Brantley, who operates 9,000 acres of rice, cotton, corn and soybeans, said if the provision passes, his family could not participate in farm programs.

“For our type of farm, there are multiple people in charge of management,” he said. “Someone needs to define ‘labor.’ Is it also bookkeeping, tax preparation, and those kinds of things? There are things other than carrying a shovel that make the farm productive.”

Brantley said his operation includes nine partners, all of whom contribute some type of management to the farm. “Now only one partner could qualify,” he said. “Hopefully they can take that part of the bill out or leave it as is.”

However, the National Sustainable Agriculture Coalition disagrees, pointing to the GAO report that shows payments are too often incorrectly allocated under the current definition.

According to the most recent GAO report, FSA officials said current “actively engaged” regulations are too vague to enforce in a meaningful way. Also, general partnerships with 11 or more individual members received 84 percent of their farm payments based on members contributing “active personal management only.”

“Mega-farms that have organized themselves so they are general partnerships could have 10 to 15 partners,” NSAC Policy Director Ferd Hoefner said. “Usually, only one or two are farmers and landowners, (while the) others are qualifying under this vague management definition.”

Under the current proposals in both farm bills, any operation receiving commodity title benefits may have one farmer performing labor and one additional manager who qualifies. Hoefner explained that the current proposal is a shift from previous Senate proposals, where a farm manager must also work a certain number of hours.

The FSA said the approach allowing one manager instead of measuring hours is easier to enforce, Hoefner noted.

“We would rather see a quantifiable test, but the new provision has the benefit of FSA saying it’s more straightforward and easier for them to enforce,” he said.

Agri-Pulse Associate Editor Sarah Gonzalez contributed to this report.

Editor’s note: Agri-Pulse Editor Sara Wyant can be reached at www.agri-pulse.com.

Date: 11/18/2013



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