USDA Farming Rule Creates New Loopholes

A draft rule issued by USDA aims to define what it means to be ‘actively engaged’ in farming. The proposed rule makes some important changes, but those improvements are immediately undermined by two new loopholes introduced in the rule.
The draft rule, somewhat unabashedly, only applies to farms that are large enough to “require” quadruple the statutory limit. You can abuse the rules, as long as you only abuse them up to $500,000 ($1 million if you’re married) each year.
Moreover, 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.
This means a large operation can add their cousin in New York or their grandchild in San Francisco. If you have 16 cousins scattered around the country, you can pull down 16 times the limit.  In Washington, this passes for reform.
We are disappointed, but not surprised. This has always been a fight for the ages 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.