USDA has extended the deadline for recording farm organization structures to make sure all producers “have as much information as they need to make decisions about actively engaged in farming determinations,” the administrator of FSA says.
Producers now have until July 1 to complete their restructuring or finalize any operational change that may be needed after the Agriculture Department implemented the new actively engaged rules required by the Agricultural Act of 2014.
“We have done a lot of outreach around actively engaged since we started this rulemaking process last year,” says Val Dolcini, administrator of USDA’s Farm Service Agency. “That included sending postcards and even calling individual folks that we thought would be impacted by the rule – local county offices did that in Mississippi and throughout the Delta.
“We’re going to continue during the next 30 days, given the extension, to make sure folks have as much information about this as they need. I think everyone who is potentially impacted – and it’s a relatively small number of producers – has had the opportunity to visit with their local county office about what it’s impact will be.”
Dolcini said FSA estimates there are about 15,000 general partnerships and joint ventures included along with the 1.7 million individual farmers who participate in the Farm Service Agency safety net programs.
'30 days should help'
“From that number (15,000) we thought there might be an even smaller number who would potentially be impacted by this rule,” said Dolcini. “Again, it is a small number who are impacted by this revised definition, and for those who need to talk to their county office we thought this 30 days would help them do that.”
The 2014 farm bill directed the agriculture secretary to amend the Actively Engaged in Farming rules related to management. The final rule established limits on the number of individuals who can qualify as actively engaged using only management.
Only one payment limit for management is allowed under the rule, with the ability to request up to two additional qualifying managers for large and complex operations. (In general, farming operations can receive a payment limit for an additional non-family member if they are in excess of 2,500 acres and up to three managers if they are not only large, but complex.)
The rule does not apply to farming operations comprised entirely of family members. It also does not change the existing regulations related to contributions of land, capital, equipment or labor, or the existing regulations related to landowners with a risk in the crop or to spouses.
Producers that planted fall crops have until the 2017 crop year to comply with the new rules. The payment limit associated with Farm Service Agency farm payments is generally limited annually to $125,000 per individual or entity.
More than direct, counter-cyclical payments
Dolcini said USDA had more than 1.76 million individual farmers sign up for the Agricultural Risk Coverage (ARC) or the Price Loss Coverage (PLC) program in 2015, which is more than participated in FSA direct and counter-cyclical payment programs under previous farm bills.
Given the cutbacks the agency has experienced under the budget sequestration program, “FSA staffs all over the country did an enormous amount of work last year to get ARC and PLC up and running,” Dolcini said. “And, of course, those county offices are involved in ARC and PLC sign-up as we speak.
“Folks are coming into those offices to do acreage reporting and all the things they do in the summer time when they interact with their FSA offices. We’ve had a lot of increase in loan activity as well.”
Dolcini said FSA is now about 20 percent above where it was at this time last year in terms of farm loan activity, due to the softening of commodity prices and the ag economy in 2014 and 2015.
“This has people talking with their lenders whether it us or commercial lenders about servicing loans or restructuring loans and seeing what kind of credit might be available should they need it,” he said.
Dolcini was traveling to North and South Dakota following an interview with Delta Farm Press to attend the South Dakota Governor’s Ag Summit and a series of visits with farmers and county offices in those states.
“I suspect the same issues will be brought to my attention when I’m traveling in South and North Dakota as I heard when I was traveling on the West Coast a few weeks ago and when I’ll be in Tennessee and Kentucky in July,” he noted.
“Farmers all over the nation are all being impacted by the change in the ag economy and the decline in commodity prices, and that makes our safety net programs and our credit programs even that more important.”
For more information on USDA and its programs, visit www.usda.gov/results.