{
  "id": "R44656",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R44656",
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      "source": "EveryCRSReport.com",
      "id": 593165,
      "date": "2019-03-07",
      "retrieved": "2019-12-20T19:48:13.862668",
      "title": "USDA\u2019s Actively Engaged in Farming (AEF) Requirement",
      "summary": "In 1987, Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203, \u00a7\u00a71301-1307), which requires that an individual or legal entity be \u201cactively engaged in farming\u201d (AEF) to be eligible for federal commodity revenue support programs. AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. Designing a transparent and comprehensive AEF definition has proven difficult and has evolved over the years. The current set of laws and rules governing farm program eligibility\u2014for both family and nonfamily members on farm operations\u2014remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. In particular, critics contend that current U.S. Department of Agriculture (USDA) eligibility criteria\u2014especially for providing active personal management\u2014remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of new farm operation members simply to expand an operation\u2019s farm payment receipts. \nThree major categories of legal entities are subject to AEF requirement for program payment eligibility: an individual, a partnership, and a corporation. \nAn individual must meet three specific AEF criteria. First, independently and separately from other individuals with an interest in the farm business, the person makes a significant contribution to the operation of: (a) capital, equipment, or land; and (b) active personal labor and/or active personal management. Second, the person\u2019s share of profits or losses is commensurate with his/her contribution to the farming operation. Third, the person shares in the risk of loss from the farming operation. \nAn individual that meets the AEF criteria is eligible for farm program payments but subject to annual payment limits. If a married person meets the AEF requirements, any spouse will also be considered to have met the AEF requirements, thus effectively doubling the individual payment limit. Also, every family member 18 years or older who receives income based on the farm\u2019s operating results is deemed to meet the AEF requirements and is eligible for a separate payment limit. Another exception to AEF requirements is made for landowners provided they receive income based on the farm\u2019s operating results.\nA general partnership is an association of multiple persons whereby each member is treated separately and individually for purposes of determining eligibility and payment limits. A partnership\u2019s potential payment limit is equal to the limit for a single person times the number of persons or legal entities that comprise the operation\u2019s ownership and meet the AEF requirements. Thus, adding a new member can potentially provide an additional payment limit. A corporation is an association of joint owners that is treated as a single person for purposes of determining eligibility and payment limits, provided that the entity meets the AEF and other eligibility criteria. Adding a new member generally does not affect a corporation\u2019s payment limit but only increases the number of members that can share a single payment limit.\nIn accordance with a provision in the 2014 farm bill (P.L. 113-79; \u00a71604), USDA added more specificity to the role that a nonfamily member of a partnership or joint venture must play to qualify for farm program benefits. However, considerable issues remain that may be of interest to Congress. Long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA\u2019s new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations.",
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      "typeId": "REPORTS",
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      "source": "EveryCRSReport.com",
      "id": 456562,
      "date": "2016-10-19",
      "retrieved": "2016-11-28T21:20:37.242047",
      "title": "USDA\u2019s Actively Engaged in Farming (AEF) Requirement",
      "summary": "In 1987, Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203, \u00a7\u00a71301-1307), which requires that an individual or legal entity be \u201cactively engaged in farming\u201d (AEF) to be eligible for federal commodity revenue-support programs. AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. Designing a transparent and comprehensive AEF definition has proven difficult and has evolved over the years. The current set of laws and rules governing farm program eligibility\u2014particularly for family members on farm operations\u2014remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. In particular, critics contend that current U.S. Department of Agriculture (USDA) eligibility criteria\u2014especially for providing active personal management\u2014remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of new farm operation members simply to expand an operation\u2019s farm payment receipts. \nThree major categories of legal entities are subject to AEF requirement for program payment eligibility: an individual, a partnership, and a corporation. An individual must meet three specific AEF criteria. First, independently and separately from other individuals with an interest in the farm business, the person makes a significant contribution to the operation of (a) capital, equipment, or land; and (b) active personal labor and/or active personal management. Second, the person\u2019s share of profits or losses is commensurate with his/her contribution to the farming operation. Third, the person shares in the risk of loss from the farming operation. An individual that meets the AEF criteria is eligible for farm program payments but subject to annual payment limits. If a married person meets the AEF requirements, any spouse will also be considered to have met the AEF requirements, thus effectively doubling the individual payment limit. Another exception to AEF requirements is made for landowners provided they receive income based on the farm\u2019s operating results.\nA general partnership is an association of multiple persons whereby each member is treated separately and individually for purposes of determining eligibility and payment limits. A partnership\u2019s potential payment limit is equal to the limit for a single person times the number of persons or legal entities that comprise the operation\u2019s ownership and meet the AEF requirements. Thus, adding a new member can potentially provide an additional payment limit. A corporation is an association of joint owners that is treated as a single person for purposes of determining eligibility and payment limits, provided that the entity meets the AEF and other eligibility criteria. Adding a new member generally does not affect a corporation\u2019s payment limit but only increases the number of members that can share a single payment limit.\nIn accordance with a provision in the 2014 farm bill (P.L. 113-79; \u00a71604), USDA added more specificity to the role that a nonfamily member of a partnership or joint venture must play to qualify for farm program benefits. However, considerable issues remain that may be of interest to Congress. Long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA\u2019s new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations.",
      "type": "CRS Report",
      "typeId": "REPORTS",
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  "topics": [
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}