Concerns over 'actively engaged' and the federal budget

Concerns over 'actively engaged' and the federal budget

How might Congress hit agriculture with the budget? Definition of 'actively engaged' farmer set to change.

In mid-March, both the House and Senate budget committees passed fiscal year 2016 budget resolutions. The House budget would have the House Agriculture Committee save $1 billion over a decade. While the Senate proposes $5.1 trillion in savings over a decade, it doesn’t include any budget reconciliation reductions for agriculture.

How might the final budget impact the Mid-South?

“We’re watching that closely," says Andrew Grobmyer, executive vice president of the Agricultural Council of Arkansas. It looks like the House will try to fund additional savings from agriculture through nutrition programs.

“I haven’t seen the totals of the Senate’s farm bill-related amendments but hope they don’t try to re-open the bill. We feel the 2014 farm bill already provided substantial savings from the agriculture sector. To re-open it only a year after it was signed into law isn’t wise.

“We were glad to see the budget process by Congress not propose any radical reforms to the farm bill law. We were pleased to also see some pretty strong message votes on amendments related to the Obama administration’s recent actions related to Waters of the U.S. and Critical Habitat Designations. We have serious concerns with how the administration is overreaching with the Clean Water Act, Clean Air Act, and the Endangered Species Act. Their efforts, if successful, could have significant negative impacts on our state’s economy, especially agriculture.”

‘Actively engaged’

On April 1, the USDA announced a proposed rule to limit farm payments to non-farmers. The rule targets the definition of an “actively engaged” farmer.

In a press release, the USDA said the current definition, “established in 1987, is broad, allowing individuals with little to no contributions to critical farm management decisions to receive safety-net payments if they are classified as farm managers, and for some operations there were an unlimited number of managers that could receive payments.

The proposed rule seeks to close this loophole to the extent possible within the guidelines required by the 2014 farm bill.”

The USDA insists family farms needn’t worry about the change. “There will also be no change to existing rules for contributions to land, capital, equipment, or labor. Only non-family farm general partnerships or joint ventures comprised of more than one member will be impacted by this proposed rule.”

What is Grobmyer’s take on the proposed rule?

“We’re still reviewing it. At first glance, though, it could have been worse. They could have taken a more strict approach.

“Still, there are some potential problems with it. We’re hearing back from our members on how it may affect them and want to get some legal advice about the details of the rule would impact a variety of Arkansas farm businesses. There isn’t a single model. A lot of farms are structured differently – some are family-structured, some quasi-family, on and on. Because of that it’s hard to know just how all the farms would fare under the proposed language.

“In general, having the family exemption is important and appreciated. But there may be other issues that will arise as we study it.”

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