The Agriculture Department is ditching a change in commodity program subsidy eligibility rules that would have unintentionally made it harder for some members of family farming operations to qualify for payments, a top official says.

final rule the Farm Service Agency published in August required all potential subsidy recipients meet the eligibility requirements for being “actively engaged” in farming. Those requirements mean a payment recipient must provide either 25% of a farm’s total management hours on an annual basis or perform at least 500 hours of management annually.

In a change formally described as a “correction” to that rule, the FSA says those requirements will only apply to farming operations that are comprised of nonfamily members and subject to a limit in the number of farm managers who can qualify as actively engaged in farming. 

FSA Administrator Richard Fordyce told Agri-Pulse on Wednesday that expanding the eligibility requirements to family operations was an oversight. 

"Obviously it’s our view that it was not Congress’ intent to apply … the more restrictive tests to family farm entities. It honestly wasn’t our intent either,” he said. 

A correction notice released Wednesday says in part, "After publication of the rule, stakeholders notified FSA of concerns regarding potential non-intended, adverse effects to farming operations comprised solely of family members. In streamlining the definitions for consistency, these revised definitions were inadvertently made applicable to farming operations solely owned by family members."

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The August rule was necessary to make first cousins, nieces and nephews of farm operators eligible to receive payments, a change required by the 2018 farm bill. 

By classifying the latest change as a correction, the agency doesn’t have to go through the time-consuming process of reissuing the rule. The correction was expected to be published in the Federal Register on Thursday.

Advocates of tightening USDA payment limits applauded the August rule, but representatives of larger family operations complained to USDA that the tighter requirements would harm many family farms and complicate succession plans. 

Ferd Hoefner, senior strategic adviser for the National Sustainable Agriculture Coalition, a group that has long advocated for tightening payment limitations and eligibility rules, said USDA’s latest change is “a 180-degree reversal” of the August rule. 

“They got it right the first time by finally closing the biggest loophole in payment limit law, the management loophole that allows the nation's largest farms to draw many multiples times the statutory payment limit,” he said. “Under normal administrations, a complete reversal of an already final rule would require an entirely new rule-making process with opportunity for public comment. This action is clearly an election-driven payoff to supporters of the failed effort to reelect the president.” 

But Matthew Farrell, director of farm program services for KCoe Isom, a major agricultural accounting firm, said the correction was a "great first step" in providing "farm program fairness" for family operations.

"When we realized the impact the rule change would have on family farms we immediately organized our family farm clients to join us in reaching out to USDA and advocate for a change," he said. "By issuing a correction, USDA is helping maintain family farm eligibility for farm programs, maintain family farm succession plans, and possibly saving family farms from going through costly restructures." 

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