Very large farms use loopholes to exploit farm program payment limits and make a mockery of congressional intent. A draft rule issued by USDA aims to define what it means to be ‘actively engaged’ in farming.
But the rule misses the mark. We need your help before May 26 to send a message to USDA.
What’s in the rule?
The proposed rule makes important changes, requiring that individuals spend at least 500 hours (or a 25% share of total management time) to qualify as actively engaged in the farm operations.
But that improvement is immediately undermined by two new loopholes introduced in the rule.
We’ll call the first loophole the 4-times-the-limit-loophole. The draft rule, somewhat unabashedly, only applies to farms that are large enough to “require” quadruple the statutory limit.
The draft rule simply says, you can abuse the rules, as long as you only abuse them up to $500,000 (or $1 million if you are married) each year.
As if the 4-times-the-limit-loophole is not bad enough, the draft rule creates what we will call the extended-family-loophole.
As drafted, farms made up solely of family members are excluded from the requirement that partners be actively engaged in the farm. The proposed rule allows a large operator to skirt payment limits by adding extended family members to the books. For each relative they add, the farm can get another payment up to the limit.1
This means a large operation can add their cousin in New York or their grandchild in San Francisco. The payment limit for farms structured as family entities will be determined only by the size of their extended family. If you have 16 cousins scattered around the country, you can pull down 16 times the limit.2 In Washington, this passes for reform.
What do we think?
We are disappointed, but we are not surprised. This has always been a fight for the ages. It is a fight between big business interests on one hand and everyday farmers and taxpayers on the other hand.
The public is on record supporting policy reform that directs farm program payments to family-scale operators. Multiple polls, including one commissioned by the Center for Rural Affairs, show that farmers and rural people overwhelming support closing farm program loopholes.
Congress agrees too. During the last farm bill debate, we won reforms in both the House and the Senate to close these loopholes. In their first move to strip our victory, big business interests cut a backroom deal to strip the reform provisions from the final farm bill.
Now they are trying to call the shots as the rule is drafted.
What can you do?
We need your help to make sure the final version of this rule closes loopholes, not opens new ones.
You have until May 26 to weigh in with USDA. You can submit a comment directly to USDA here.
Here are three key points to include in your comment.
- Nothing in the rule should qualify a farm for more than one payment.
- The new payment eligibility rule should apply to all farms, regardless if they are made up of family members, non-family members, or a combination.
- The Farm Service Agency (FSA) should adopt a 1,000 hours of labor and/or management, or at least 500 hours of management, as the standard for determining whether someone is actively engaged in farming, without exception.
Here are more pointers on how to write your comment.
1 We support rules that allow actively engaged relatives farming together to each get their own payment. Two siblings, or a parent and their child should both be able to qualify, so long as they are both actively engaged in the operation.
2 The definition of family includes great-grandparents, grandparents, children, grandchildren, great grandchildren, siblings, stepchildren, adopted children, cousins, and any spouses of any of the above.
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