The U.S. Department of Agriculture (USDA) released a proposed rule to define active engagement in farming operations for the purpose of farm program payment eligibility this week. USDA was instructed in the recently passed farm bill to define what it meant to be “actively engaged” in an agricultural operation as part of an overall effort to limit farm program payments to non-farmers.

Under the proposed rule, non-family joint ventures and general partnerships must document that their managers make significant contributions to the farming operation, defined as 500 hours of substantial management work per year, or 25 percent of the critical management time necessary for the success of the farming operation. Operations that can demonstrate that they are large and complex could be allowed payments for up to three managers, but only if they can show that all three are actively and substantially engaged in farm operations.

As mandated by Congress, family farms will not be impacted. There will also be no change to existing rules for contributions to land, capital, equipment or labor.  According to USDA, fewer than 1,500 non-family farm general partnerships or joint ventures comprised of more than one member will be affected, representing less than one percent of farms in the U.S. that receive farm program payments.

The rule would apply to payment eligibility for 2016 and subsequent crop years for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) Programs and loan deficiency payments and marketing loan gains realized via the Marketing Assistance Loan Program. USDA estimates that savings for the 2016-2018 crop years will total $50 million.

USDA is accepting comments on the rule until May 26. ASA is assessing the rule’s potential effect on soybean operations and will submit official comments on the proposed rule later in the spring. If you have feedback or comments on the proposed rule you would like to share with ASA, please send them to Patrick Delaney in ASA’s Washington office at pdelaney@soy.org. The proposed rule is available here.