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USDA closes farm program payments loophole

The U.S. Department of Agriculture has blocked a loophole, ensuring that farm safety-net payments are issued only to active managers of farms that operate as joint ventures or general partnerships.

The rule exempts family farm operations and is consistent with the direction and authority provide by Congress in the 2014 Farm Bill.

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"The federal farm safety-net programs are designed to protect against unanticipated changes in the marketplace for those who actively share in the risk of that farming operation," Agriculture Secretary Tom Vilsack said in a news release. "To ensure that help goes to those who genuinely need it, such as America's farm families, the Farm Bill authorized USDA to close a loophole and limit payments from those not involved on a daily basis in non-family farm management."

According to a USDA news release, the broad definition of "actively engaged" resulted in some general partnerships and joint ventures adding managers to the farming operation and qualifying for more payments. The rule applies to operations seeking more than one farm manager, and requires measurable, documented hours and key management activities each year. Some operations of certain sizes and complexity may be allowed up to three qualifying managers under limited conditions. The changes apply to payments for 2016 and subsequent crop years for Agriculture Risk Coverage and Price Loss Coverage Programs, Loan Deficiency Payments and Marketing Loan Gains realized via the Marketing Assistance Loan program.

As required by Congress, the new rule does not apply to family farms, or change regulations related to contributions of land, capital, equipment, or labor, according to the release. The changes go into effect for the 2016 crop year for most farms. Farms that have already planted fall crops for 2016 have until the 2017 crop year to comply. For more details, producers are encouraged to consult their local Farm Service Agency office.

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