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Actively engaged provisions for non-family joint operations or entities

• Sep 22, 2018 at 10:00 AM

Many Farm Service Agency programs require all program participants, either individuals or legal entities, to be “actively engaged in farming.”

This means participants provide a significant contribution to the farming operation, whether it is capital, land, equipment, active personal labor and/or management.

For entities, each partner, stockholder or member with an ownership interest, must contribute active personal labor and/or management to the operation on a regular basis. Joint operations comprised of non-family members or partners, stockholders or persons with an ownership in the farming operation must meet additional payment eligibility provisions.

Joint operations comprised of family members are exempt from these additional requirements.

For 2016 and subsequent crop years, non-family joint operations can have 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 will be defined as the farm manager for the purposes of administering these management provisions. Non-family joint operations may request to add up to two additional managers for their farming operation based on the size and/or complexity of the operation. If additional farm managers are requested and approved, all members who contribute management are required to complete form CCC-902MR, Management Activity Record.

The farm manager should use the form to record management activities including capital, labor and agronomics, which includes crop selection, planting decisions, acquisition of inputs, crop management and marketing decisions. One form should be used for each month and the farm manager should enter the number of hours of time spent for each activity under the date of the month the actions were completed. The farm manager must also document if each management activity was completed on the farm or remotely. The records and supporting business documentation must be maintained and timely made available for review by the appropriate FSA reviewing authority, if requested.

If the farm manager fails to meet these requirements, their contribution of active personal management to the farming operation for payment eligibility purposes will be disregarded and their payment eligibility status will be re-determined for the applicable program year. In some instances, additional persons or members of a non-family member joint operation who meet the definition of farm manager may also be allowed to use such a contribution of active personal management to meet the eligibility requirements. 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.

In other news...

Payments to deceased producers: In order to claim a FSA payment on behalf of a deceased producer, all program conditions for the payment must have been met before the applicable producer’s date of death. If a producer earned a FSA payment prior to becoming deceased, the following is the order of precedence of the representatives of the producer: administrator or executor of the estate, the surviving spouse, surviving sons and daughters, including adopted children, surviving father and mother, surviving brothers and sisters, heirs of the deceased person who would be entitled to payment according to the State law.

In order for FSA to release the payment, the legal representative of the deceased producer must file a form FSA-325, to claim the payment for themselves or an estate. The county office will verify and determine that the application, contract, loan agreement, or other similar form requesting payment issuance, was signed by the applicable deadline for such form, by the deceased or a person legally authorized to act on their behalf at that time of application.

If the application, contract or loan agreement form was signed by someone other than the participant who is deceased, FSA will determine whether the person submitting the form has the legal authority to submit the form to compel FSA to pay the deceased participant. Payments will be issued to the respective representative’s name using the deceased program participant’s tax identification number. Payments made to representatives are subject to offset regulations for debts owed by the deceased. FSA is not responsible for advising persons in obtaining legal advice on how to obtain program benefits that may be due to a participant who has died, disappeared or who has been declared incompetent.

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