Payment eligibility an important provision of USDA benefits

USDA?s Farm Service Agency administers farm programs once authorized by the Congress of the United States.

There are a myriad of programs available to farm owners, operators, and producers. Enrolling and benefiting from various programs often requires considerable preparation; both of USDA employees as well as producers and landowners. One of the more complex program requirements involves payment eligibility. As mentioned in previous news releases, the history of this program provision began with the Agricultural Act of 1970 and has been carried forward with each new piece of agricultural legislation, along with revisions and adjusted limits for certain programs in which landowners and growers enroll.

Each program offered through USDA requires that certain provisions of payment eligibility be met by applicants to receive benefits. Some programs require determinations involving ?Person,? ?Actively Engaged in Farming,? ?Cash-Rent tenant,? ?Permitted Entity,? ?Foreign Person,? ?Adjusted Gross Income? and ?Gross Income/Revenue.? Not all of these provisions must be met for each program, but local FSA committees must review and make the appropriate determinations before program benefits can be issued.

?Anytime there is a change in the structure of the farming operation, such as the addition of members (son, daughter, partner), increases or decreases in land, changes in land rental arrangements (share leases versus cash leases); a revised payment eligibility form should be submitted to the county office,? said Gordon Wade, member of the Warren County FSA Committee. ?Changes in farming operations must be legitimate ?arms length? business transactions. For example, when bringing a partner into a farming operation for the first time, there must be an approximate 20 percent increase in cropland involved in the farming operation.?

Cash-Rent tenant rules apply to any producer who rents land from another producer for cash or a crop share guaranteed as the amount of the commodity to be paid in rent. According to Wade, the provisions also apply to tenant who rent land for ?zero dollars,? or who farm the land in exchange for compensation other than cash, such as agreements for controlling weeds, mowing pastures, or other barter agreements. Any person who is a cash-rent tenant will be ineligible to receive payments unless the ?cash-rent tenant? makes a significant contribution of active personal labor to the farming operation, OR makes a significant contribution of both active personal management and equipment.

?Person determinations must also be made for joint operations, for limited liability companies, limited partnerships, corporations, trusts, and estates. Each operation has separate rules and requirements that must be met before the entity is determined eligible for program benefits. Separate person and actively engaged in farming rules apply to corporations, trusts, LLCs, LPs, and LLPs,? said Wade. ?County Committees are charged with responsibility of making a determination within 60 days of the date the eligibility forms are signed by the producer. Once a determination is made, producers are given the opportunity to request reconsideration or review if the determination is adverse. ?

Wade says FSA is reviewing information on all farm program participants in 2007 to ensure that any changes made have been reported and updated with the local FSA offices.

?We want all applicants to be eligible for benefits, if possible. If a person needs to update their farming operations, they should do so as soon as they can,? he noted.

The committee member encourages producers who are participating in the current Direct-Counter Cyclical Payment Program (DCP) to contact the local FSA office to arrange a time to complete DCP contracts as well.

?The office staff has been advised that access to the enrollment process has been limited from 12 noon until 5:00 pm daily. Local offices will only be able to process applications during this time,? he said. The final date for enrollment in DCP is June 1, 2007.

For additional information of Payment Eligibility, Direct and Counter Cyclical Payments, or other USDA programs, contact the Warren County FSA Office located at 811 Faulkner Springs Road.