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Payment Limitation/Eligibility

USDA payments and benefits are subject to producer eligibility and limitation provisions as defined by law. Documents and forms to determine eligibility and limitation once completed are reviewed on an annual basis. It is the producer’s responsibility to report changes in the farming operation which may affect payment eligibility and payment limitation.

All forms submitted by producers are subject to spot check through the end-of-year review process.  Producers selected will be required to provide documentation such as operating loan documents, canceled checks for farm operating expenses and hired labor/management, lease agreements and crop sale documents. 

Entities such as corporations, limited partnerships, trusts and estates are required to provide names, addresses, and ID numbers of their members.

Actively engaged in farming provisions apply to DCP and ACRE program participants.  To be considered actively engaged in farming a producer, joint operation or entity must provide a significant contribution of capital, land or equipment AND a significant contribution of active personal labor or management.  Member’s contributions must be commensurate with their claimed share of the profits and losses and must be at risk.  For participants that cash rent land there is a higher standard that must be met called the cash-rent tenant provisions.  This additionally requires either a significant contribution of active personal labor or a significant contribution of active personal management AND equipment. 

Each member of an entity must provide active personal labor or active personal management or a combination that is performed on a regular basis, identifiable and documentable and separate and distinct from the contributions of any other member.  Payments will be reduced by any member’s share that does not meet this requirement.

Starting in 2010 a change has been implemented to permit certain operations, most often family-run operations, to meet actively engaged in farming requirements under less restrictive rules: 

Every stockholder or member of a legal entity, such as a corporation, does not have to contribute labor or management if both of the following apply:

• at least half of the interest in the legal entity held by stockholders or members who are providing active personal labor or active personal management that altogether qualifies as a significant contribution to the farming operation
• the members are collectively receiving, directly and indirectly, total direct payments under DCP and ACRE that are less than or equal to 1 limitation.