The United States Department of Agriculture has announced changes to both adjusted gross income qualifications, program payment limitations, and direct attribution for Farm Service Agency and Natural Resources Conservation Service programs, which became effective in accordance with the 2008 Farm Bill.
"Changes to program participation rules and qualifying income requirements will make farm program payments more defendable to America's taxpayers," Agriculture Secretary Ed Schafer said. "This is a step in the right direction to ensuring that program benefits are targeted to active qualifying farmers and ranchers."
For commodity and disaster programs, the adjusted gross income limitation was reduced from $2.5 million adjusted gross income from all sources to a three-year average non-farm adjusted gross income of $500,000 such that a person or entity shall not be eligible for such programs if the non-farm adjusted gross income exceeds $500,000.
Also, under the new regulations, an individual or entity must have a 3-year average adjusted gross income less than or equal to $750,000 per year from farm income in order to qualify for direct payments issued under the direct and counter-cyclical program.
The definition of income derived from farming, ranching and forestry operations was expanded to include, among other items, such items as the packing, storing and transporting of agricultural commodities; production of livestock products; farm-based production of renewable bio-energy; and in some instances, the providing of operational inputs to farmers, ranchers and foresters.
For conservation programs, the average nonfarm adjusted gross income limitation is $1 million or less for eligibility. However, an individual or entity who has non-farm adjusted gross income in excess of $1 million remains eligible for conservation programs only if 66.66 percent or more of the total adjusted gross income is derived from farming, ranching and forestry operations.
In addition, the adjusted gross income limitation for conservation programs may be waived on a case-by-case basis if it is determined that environmentally sensitive land of special significance would be protected.
Program payments are limited by direct attribution to individuals or entities.
A legal entity is defined as an entity created under federal or state law that owns land or an agricultural commodity, product or livestock.
Qualifying spouses are eligible to be considered separate persons for payment limitation purposes, rather than being automatically combined under one limitation.
Individuals and entities must be "actively engaged in farming" with respect to a farming operation in order to be eligible for specified payments and benefits.
To be "actively engaged in farming," the individual or entity must make significant contributions to the farming operation of: (1) capital, equipment, land, or a combination; and (2) personal labor or active personal management, or a combination.
For more information, visit www.usda.gov.
