US Government Proposes New Definition of Farms
US Government Proposes New Definition of Farms

The U.S. Government is revising its definition of a farm. As per the new definition, some people who receive farm subsidies but do not carry out any sort of work would receive less government money.

Congress last year assigned the Agriculture Department a task of creating a new definition for what it means to be 'actively engaged' in farming, a criteria to receive subsidy.

USDA on Tuesday proposed that farms must document their managers and must put in 500 hours of substantial management work annually or 25% of the time necessary for the success of the farming operation to qualify.

Agriculture Secretary Tom Vilsack said, "We want to make sure that farm program payments are going to the farmers and farm families that they are intended to help".

The rules would apply only to some farm businesses. Congress has exempted family owned entities, which have some of the country's largest farms.

According to USDA, there are possibilities that almost 1,400 operations might lose the eligibility under the rules, saving around $50 million over a three-year period.

The rules have to be framed due to concerns that some people were abusing the idea of 'actively engaged' to qualify for subsidies.

A report released by the Government Accountability Office in 2013 tracked some farms that received hundreds of thousands of subsidies a year and claimed that 11 or more people were actively engaged in the operations.

As per the new rule, up to three managers per operation can receive subsidies. Farmers roughly receive $5 billion a year under the actively-engaged requirements.

The proposed rule will allow people to claim active personal management. It is focused on farm businesses that are organized as general partnerships, like multiple members share management, and non-family joint ventures.

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