Actively Engaged in Farming

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Actively Engaged in Farming

To be eligible for FSA payments under specified programs, all program participants, either individuals or legal entities, must provide significant contributions to the farming operation to be considered “actively engaged in farming”.

Contributions must consist of a combination of the following:

  • Capital
  • Land
  • Equipment
  • Active Personal Labor
  • Active Personal Management

Contribution requirements can differ based on the structure of the farming operation. Click below to find out the contribution requirements for your structure.

About the Program

Individuals

Significant Contribution of 1 or more of the following:

  • Land
  • Capital
  • Equipment
  • Or combination thereof

AND a significant contribution of 1 or more of the following

  • Active Personal Labor
  • Active Personal Management
  • Or combination thereof

Landowners will be considered Actively Engaged on owned land even if the above contributions are not being made. Crop Land Factors may apply on ground that is not owned.

Revocable and Irrevocable Trusts

Qualifying Contribution of 1 or more of the following by the Revocable or Irrevocable Trust:

  • Land
  • Capital
  • Equipment
  • Or combination thereof

AND a contribution of 1 or more of the following by income beneficiaries that have a combined interest of at least 50% or more of the Trust:

  • Active Personal Labor
  • Active Personal Management
  • Or combination thereof

Joint Operations, Joint Ventures & General Partnerships

Each member who shares in the income from a joint operation must make significant contributions for the joint operations to be fully eligible for payment.

Significant Contribution of 1 or more of the following by each member OR the joint operation:

  • Land
  • Capital
  • Equipment
  • Or combination thereof

AND a significant contribution of 1 or more of the following of each member:

  • Active Personal Labor
  • Active Personal Management
  • Or combination thereof

Landowners will be considered Actively Engaged on owned land even if the above contributions are not being made. Crop Land Factors may apply on ground that is not owned.

There are limitations on the number of members that can use the significant contribution of active personal management as their sole active personal contribution for Non-Family Joint Operations.

Corporations, LLC’s, LLP’s, and LP’s

Significant Contribution of 1 or more of the following by the legal entity:

  • Land
  • Capital
  • Equipment
  • Or combination thereof

AND 1 or more members holding at least 50% ownership in the entity make a significant contribution of:

  • Active Personal Labor
  • Active Personal Management
  • Or combination thereof

Landowners will be considered Actively Engaged on owned land even if the above contributions are not being made. Crop Land Factors may apply on ground that is not owned.

Estates

For 2 program years after the program year in which a person dies, the estate shall be considered to be actively engaged if the contributions below are met.

Significant contribution of the estate of 1 or more of the following:

  • Land
  • Capital
  • Equipment
  • Or combination thereof

AND the personal representative or heirs of the estate collectively make a significant contribution of 1 or more of the following:

  • Active Personal Labor
  • Active Personal Management
  • Or combination thereof

Landowners will be considered Actively Engaged on owned land even if the above contributions are not being made. Crop Land Factors may apply on ground that is not owned.

Following the period of 2 program years after the program year in which a person dies, the deceased person’s estate shall not be considered to the actively engaged in farming UNLESS, on a case-by-case basis, the County Committee determines that the estate is still active.

Significant Contributions Definitions

Land – The land must have a rental value equal to at least 50% of the person’s or legal entity’s commensurate share of the total rental value of the land necessary to conduct the farming operation.

Note: Share-rented land is a contribution of the landlord, not the share-renter.

Capital – The capital must have a value equal to at least 50% of the person’s or legal entity’s commensurate share of the total capital necessary to conduct the farming operation, excluding outlays of capital for land or equipment.

Equipment - The equipment must have a rental value equal to at least 50% of the person’s or entity’s commensurate share of the total rental value of the of the equipment necessary to conduct the farming operation.

Active Personal Labor – means personally providing physical activities necessary in a farming operation including land preparation, planting, cultivating, harvesting and marketing of agricultural commodities. Active Personal labor also includes activities required to establish and maintain conserving cover crops or conserving use acreages and labor required in livestock operations. The active personal labor must be an amount that is the smaller of:

  • 1,000 hours per either FY or crop year
  • 50% of the total hours that would be required to conduct a farming operation comparable in size to this person’s or legal entity’s commensurate share in the farming operation.

Active Personal Management – Significant contribution of active personal management means the active personal management performed by a person, with a direct or indirect ownership interest in the faring operation that is:

  • On a regular, continuous and substantial basis for the farming operation
  • Meets at least 1 of the following to be considered significant:
    • Equals at least 25% of the total management hours required for the farming operation on an annual basis
      OR
    • Equals at least 500 hours of management activities annually for the farming operation.