2018 Farm Bill Primer: Program Eligibility and Payment Limits

2018 Farm Bill Primer: Program Eligibility and Payment Limits

link to page 2

April 3, 2019
2018 Farm Bill Primer: Program Eligibility and Payment Limits
Since 1970, Congress has used various policies to address
from the farming operation; and (3) have a share of profits
the issue of who should be eligible for farm program
or losses commensurate with his or her contribution to the
payments and how much an individual recipient should be
operation.
permitted to receive in a single year. In recent years,
A spouse of any person meeting the AEF requirements is
congressional debate has focused on (1) ensuring that
considered to have met the requirements, thus doubling the
payments go to persons or entities currently engaged in
individual payment limit. Also, every member of a family
farming, (2) attributing payments directly to individual
farm engaged in farming (including cousins, nephews, and
recipients, (3) capping the amount of payments that a
nieces) age 18 years or older may be deemed AEF and
qualifying recipient may receive in any one year, and (4)
eligible for a separate payment limit. Another exception to
excluding from payment eligibility those farmers or
AEF requirements is made for landowners, provided they
farming entities with incomes above a certain level as
receive income based on the farm’s operating results.
measured by their adjusted gross income (AGI).
Partnership. Under a partnership, each member must
Most recently, the 2018 farm bill (Agricultural
individually meet all program requirements, including AEF
Improvement Act of 2018, P.L. 115-334) amended
and AGI requirements. Each qualifying member is
eligibility requirements for benefits under current farm
potentially eligible for payments up to the individual limit.
programs and annual payment limits that vary across
Corporation. A corporation is treated as a single person for
different combinations of farm programs. Major federal
purposes of determining eligibility and payment limits,
farm programs, along with their current eligibility
provided that it meets the AEF and other eligibility criteria.
requirements and payment limits, are listed in Table 1.
Thus, a corporation is subject to a single payment limit.
Program Eligibility
Conservation Compliance
Some requirements are common across most programs,
To be eligible for most farm program benefits, a producer
while others are specific to individual programs. Current
agrees to maintain a minimum level of conservation on
eligibility requirements that are specific to each program
highly erodible land and not to convert or make production
participant but affect multiple programs include:

possible on wetlands. Collectively, these two provisions are
identification of every participating person or legal
referred to as conservation compliance.
entity—both U.S. and non-U.S.;
 the nature and extent of an individual’s participation
AGI Threshold
(i.e., actively engaged in farming criteria), including
Persons with combined farm and nonfarm AGI in excess of
ownership interests in multi-person entities and personal
$900,000 are ineligible for most program benefits. Average
time commitments (whether as labor or management);
AGI is measured from the three tax years prior to the most
 conservation compliance provisions; and
recent taxable year. The AGI limit may be waived on a

case-by-case basis to protect environmentally sensitive land
means testing based on an AGI threshold.
of special significance.
Is U.S. Citizenship Required?
Direct Attribution and Payment Limits
In general, if foreign persons or legal entities meet a
program’s eligibility requirements, then they are eligible to
Tracking payments to an individual through ownership
levels in single or multi-person legal entities—referred to as
participate. One exception is the permanent disaster
direct attribution—is critical for assessing an individual’s
assistance programs—Emergency Assistance for Livestock,
cumulative payments against his or her annual payment
Honeybees, and Farm-Raised Fish Program (ELAP),
limit. Current law requires direct attribution through four
Livestock Forage Disaster Program, Livestock Indemnity
levels of ownership in multi-person legal entities.
Program (LIP), Tree Assistance Program (TAP), and the
Noninsured Crop Disaster Assistance Program (NAP)—
Issues for Congress
under which non-resident aliens are excluded.
Eligibility requirements and payment limits strongly
Actively Engaged in Farming (AEF)
influence what size and type of farms are supported.
Congress has debated what annual payment limit amount is
Three categories of legal entities are subject to AEF
optimal and whether the limit should be specific to each
requirements for certain farm support program payment
program or cumulative across all programs. Program
eligibility: an individual, a partnership, and a corporation.
eligibility requirements and payment limits generate
Individual. To be considered AEF, an individual must (1)
congressional interest because their effects differ across
make a significant contribution to the farm of capital,
regions and by type of commodities produced and because
equipment, or land and be active though personal labor
a substantial amount of annual U.S. farm program payments
and/or personal management; (2) share in the risk of loss
are at stake.
https://crsreports.congress.gov

link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 2018 Farm Bill Primer: Program Eligibility and Payment Limits
Table 1. Farm Program Eligibility Requirements and Payment Limitations Under the 2018 Farm Bill
Farm Program Type
AEF
Citizena
AGI
CC
Payment Limit
Commodity Programs

PLC and ARC payments (all except peanuts)

—


$125,000 per CYb
PLC and ARC payments for peanuts

—


$125,000 per CYb
Benefits under the MAL programc

—


Unlimited
Cotton Ginning Cost Share program

—


$40,000 per person
Sugar Program (implicit price support benefits)
—
—
—
—
Unlimited
Dairy Risk Coverage (DRC) program
—
—
—

Unlimited
Market Facilitation Program (MFP)

—


$125,000 by persond
Disaster Assistance Programs

Livestock Forage Disaster Program
—



$125,000 per CY
ELAP, LIP, and TAP programs
—



Unlimited
NAP: catastrophic coverage
—



$125,000 per CY
NAP: additional coverage
—



$300,000 per CY
Crop Insurance Programs

Premium subsidies and indemnity payments
—
—
—

Unlimited
Conservation and Landscape Assistance Programs

Conservation Reserve Program (total rental payments)
—
—
e

$50,000 per FY
Conservation Stewardship Program
—
—


$200,000f
Environmental Quality Incentives Program
—
—
e

$450,000f
Agricultural Management Assistance
—
—


$50,000 per FY
Agricultural Conservation Easement Program
—
—


Based on easement value
Regional Conservation Partnership Program
—
—
e

Unlimited
Emergency Conservation Program
—
—


$500,000 per disaster
Emergency Forest Restoration Program
—
—


$500,000 per disaster
Emergency Watershed Protection Program
—
—
—

Based on project amount
Miscellaneous

Trade Adjustment Assistance for Farmers



—
$12,000 over 36 months
Source: Compiled by CRS from various sources. For details, see CRS Report R44739, U.S. Farm Program Eligibility and Payment Limits; CRS
Report R45310, Farm Policy: USDA’s Trade Aid Package; and CRS Report R42459, Conservation Compliance and U.S. Farm Policy.
Notes: “” implies that this is a necessary requirement for payment eligibility, “—“ implies that it is not a necessary requirement. AEF =
actively engaged in farming criteria, AGI = adjusted gross income limit, ARC = Agricultural Risk Coverage, CC= conservation compliance, CY =
crop year, FY = fiscal year, MAL = marketing assistance loan program, NAP = Noninsured Disaster Assistance Program, and PLC = Price Loss
Coverage.
a. U.S. citizenship or resident alien status required, assuming that any AEF requirements are met.
b. Payment limits apply to combined ARC and PLC payments after any sequestration reductions have been made.
c. MAL benefits include loan deficiency payments, market loan gains, and gains under commodity certificates or forfeiture
d. A separate payment limit is available for each of these three commodity groupings: crops, livestock, and specialty crops.
e. An AGI waiver for select eligible entities is available.
f. Al contracts combined for the entire period of FY2019-FY2023.

Randy Schnepf, Specialist in Agricultural Policy
Megan Stubbs, Specialist in Agricultural Conservation and

Natural Resources Policy
https://crsreports.congress.gov

2018 Farm Bill Primer: Program Eligibility and Payment Limits

IF11165

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF11165 · VERSION 1 · NEW