USDA Proposes Changes to Definition of an 'Actively Engaged' Farmer

Mar 25, 2015

The U.S. Department of Agriculture proposed changes on Tuesday to the rules that govern which farmers can receive government subsidies.

The goal is to cut off payments to people who claim they’re involved in the management of a farm, but aren’t doing much managing.

Farmers who own land, run cattle, or spend their spring planting corn can relax – the proposed rule change doesn’t impact their ability to collect up to a $125,000 a year in government subsidies.

Val Dolcini, the administrator of the Farm Service Agency, which could eventually implement the rule change, said the new rules would force farm managers to prove that their work helps keep the farm in business.

That could involve “things like arranging financing, managing the capital for the operation, the hiring and managing of labor,” Dolcini said. “Somebody who’s more than just dialing in for a regular conference call to talk about the price of beans.”

Managers of family farms are exempt from the proposed rule change, which heads to the Federal Register, where the public can comment on it for the next two months.

Not everyone is happy that family farms – a definition met by around 90 percent of U.S. producers – are exempt. Traci Bruckner from the Center for Rural Affairs told Politico “this rule does nothing more than say the largest and wealthiest farms structured solely of family members are not subject to this new rule or any payment limitation.”

The 2014 Farm Bill required the USDA to update their definition of an “actively engaged” farmer, a definition that producers must meet to remain eligible for government subsidies.

Rebpulican Sen. Chuck Grassley of Iowa called the proposed changes “a small step in the right direction,” in a statement on his website. But Grassley added that “10 percent of farms collect 75 percent of the subsidies. That uneven distribution means large farms are getting most of the benefits from farm programs.” Grassley has proposed a more stringent amendment to the Farm Bill’s definition of “actively engaged.”

If approved, the USDA estimates the change could save taxpayers about $50 million over the next three years - a fraction of the estimated $6.9 billion the federal government will spend on farm program payments in 2016.

Harvest Public Media's Abby Wendle contributed to this report.

Note: An earlier version of this post incorrectly identified Val Dolcini's position and agency.  He is the Administrator for the Farm Service Agency.

Tags: