Actively Engaged in Farming

To be eligible for payments and benefits under specified programs, all program participants, either individuals or legal entities, must provide significant contributions to the farming operation to be considered as "actively engaged in farming." Contributions can consist of capital, land, and/or equipment, as well as active personal labor and/or active personal management. The management contribution must be critical to the profitability of the farming operation and the contributions must be at risk.

Each partner, stockholder or member with an ownership interest must contribute active personal labor and/or active personal management to the farming operation on a regular basis. The contribution must be identifiable and documentable; as well as separate and distinct from the contributions made by any other partner, stockholder or member. If any partner, stockholder or member with an ownership interest fails to meet this requirement, program payments will be reduced by the corresponding share held by that partner, stockholder or member.

Spouses may both be considered "actively engaged in farming" if one spouse makes all of the requisite and at-risk contributions.

Landowners may be considered "actively engaged in farming" if they contribute the owned land to the farming operation and in return, receive rent or income for the use of the land. The landowner's share of the profits or losses from the farming operation must also be commensurate with the landowner's contributions to the farming operation and the contributions must be at risk.

The “actively engaged in farming” provisions also apply to sharecroppers, cash rent tenants, and foreign persons, but with restrictions placed on the contributions of active personal labor or active personal management.

All participants in programs subject to the “actively engaged in farming” requirements must complete a CCC-902 Farm Operating Plan, either for an individual or legal entity. The descriptions and representations disclosed about the farming operation on this form becomes the basis for the determination of payment eligibility.

Following the enactment of the 2014 Farm Bill, additional payment eligibility provisions were implemented for joint operations and legal entities comprised of non-family members or partners, stockholders or persons with an ownership interest in the farming operation. Restrictions were placed on the number of members of a non-family joint operation that may qualify as actively engaged in farming by a contribution of active personal management to the farming operation. Also, a measurable standard, either in total annual hours or percent of total management required for the farming operation, was to be applied to the contribution of active personal management for the determination of the level of significance. Effective for the 2016 and subsequent crop and program years, such farming operations are afforded one member that may use a significant contribution of active personal management exclusively to meet the requirements to be determined actively engaged in farming. The person or member afforded this active management role is also defined as a Farm Manager for the purposes of administering these new management provisions. If specific criteria are met by the persons or members and the farming operation, additional persons or members of a non-family member joint operation and legal entity who meet the definition of Farm Manager may also be allowed to use such a contribution of active personal management to meet the requirements to be determined actively engaged in farming. However, under no circumstances may the number of Farm Managers in a non-family joint operation exceed a total of three in any given crop and program year.