USDA Redefines the Term 'Actively Engaged'

New rules in effect for 2010.

Published on: Jan 4, 2010

Beginning with the 2010 program year, USDA has amended the rules that govern the requirements to be considered "actively engaged" in farming. These rules apply to eligibility for payments under the Direct and Counter-cyclical Program or Average Crop Revenue Election program administered by the USDA Farm Service Agency.

 

According to the new 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: 1/ at least half of the interest in the legal entity is 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; and 2/ the total direct payments received, both directly and indirectly, by the legal entity and each of the members does not exceed $40,000.