Payment Eligibility and

Payment Limitations

Farm Service Agency

Overview

Congress and the USDA have established requirements 

to ensure that farm program payments only go to 

farmers who are “actively engaged in farming”. The 

2018 Farm Bill extends the payment eligibility and 

payment limitation requirements for the 2019 through 

the 2023 program years. 

Actively Engaged in Farming

To be considered as “actively engaged in farming,” a 

person or legal entity (partnerships, corporations, and 

so forth), must provide significant contributions to the 

farming operation. Contributions include capital, land, 

and/or equipment, and active personal labor and/or 

active personal management. The active personal 

management contribution must be critical to the 

profitability of the farming operation. All contributions 

to the farming operation must be at risk of loss.

Who is Eligible

Each partner, stockholder or member with an 

ownership interest must on a regular basis contribute 

active personal labor and/or active personal 

management to the farming operation. The 

contribution must be identifiable and documentable, 

and separate and distinct from the contributions made 

by any other partner, stockholder or member. If any 

partner, stockholder or member with an ownership 

interest fails to meet this requirement, program 

payments will be reduced by the corresponding share 

held by that partner, stockholder or member.

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FACT SHEET

May 2019

Additional Payment Eligibility 

Provisions for Joint Operations and 

Legal Entities Comprised of 

Non-Family Members or Partners, 

Stockholders or Persons with an 

Ownership Interest in the Farming 

Operation

General partnerships and joint ventures comprised of 

non-family members must document the actions of the 

members who make significant contributions of 

management to the farming operation; defined as 500 

hours of specific management activities per year, or 25 

percent of the total management time necessary for the 

success of the farming operation. Most farming 

operations conducted by general partnerships and joint 

ventures with non-family members will be limited to 

only one member who can meet “actively engaged in 

farming” requirements and qualify for payments based 

solely on the documented contribution of active 

personal management. Operations that can 

demonstrate that they are large or complex farming 

operations, according to newly established standards, 

may be allowed an additional manager. Similarly, an 

operation that can demonstrate that it is a large and 

complex farming operation may qualify a third 

manager for payment, but only if all three managers 

can document substantial management contributions to 

the operation. 

The 2018 Farm Bill expands the definition of family 

member to include a first cousin, niece and nephew. 

The addition of first cousin, niece and nephew to the 

definition applies to all payment eligibility 

determinations, where applicable, effective beginning 

with the 2019 program year.
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PAYMENT ELIGIBILITY AND PAYMENT LIMITATIONS - MAY 2019

How it Works

Exceptions to the General Requirements

A person or legal entity that is also a landowner is 

considered “actively engaged in farming” if the person 

or legal entity landowner contributes the land to a 

farming operation and in return, receives rent or 

income for the use of the land. The landowner’s share 

of the profits or losses from the farming operation 

must also be commensurate with the landowner’s 

contributions to the farming operation; the 

contributions must be at risk of loss.

If one spouse has been determined to be “actively 

engaged in farming,” the other spouse will also be 

viewed as having met the significant contribution of 

active personal labor or active personal management in 

that same farming operation and toward meeting the 

requirements of “actively engaged in farming.”

Sharecroppers may be considered “actively engaged in 

farming” if the sharecropper makes a significant 

contribution of active personal labor to the farming 

operation and in return receives a specified share of 

the crop or crops produced on the farm. The 

sharecropper’s share of the profits or losses from the 

farming operation must be commensurate with the 

sharecropper’s contributions; the contributions must be 

at risk of loss.

A cash-rent tenant is ineligible to receive payments on 

cash-rented land unless the tenant makes a significant 

contribution of active personal labor. If the cash-rent 

tenant does not provide labor, he or she must make a 

significant contribution of both active personal 

management and equipment to the farming operation. 

All other “actively engaged in farming” requirements 

apply as well.

Foreign Persons

Foreign persons, other than registered aliens, are not 

eligible to receive certain program benefits under some 

programs such as the Agriculture Risk Coverage and 

Price Loss Coverage programs and other specific 

programs, unless the person provides a significant 

contribution of capital, land and active personal labor 

to the farming operation. Under some other programs 

(such as the Supplemental Disaster Assistance 

Programs, the Market Facilitation Program, or others) 

foreign persons are excluded from program eligibility 

altogether regardless of contributions to a farming 

operation.

Notification Requirements

Every legal entity earning payment must report to their 

local FSA committee the name and social security 

number of each person who owns, either directly or 

indirectly, any interest in that legal entity. The legal 

entity is also required to inform all members of the 

rules regarding payment eligibility and payment 

limitation.

Direct Attribution

The 2018 Farm Bill establishes a maximum dollar 

amount for each program that can be received 

annually, directly or indirectly, by each person or legal 

entity. Such limitations on payments are controlled by 

direct attribution. Program payments made directly or 

indirectly to a person are combined with the pro rata 

interest held in any legal entity that received payment, 

unless the payments to the legal entity have been 

reduced by the pro rata share of the person.
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PAYMENT ELIGIBILITY AND PAYMENT LIMITATIONS - MAY 2019

Program payments made directly to a legal entity are 

attributed to those persons that have a direct and 

indirect interest in the legal entity, unless the payments 

to the legal entity have been reduced by the pro rata 

share of the person. Payment attribution to a legal 

entity is tracked through four levels of ownership. If 

any part to the ownership interest at the fourth level is 

owned by another legal entity, a reduction in payment 

will be applied to the payment entity in the amount 

that represents the indirect interest of the fourth level 

entity in the payment entity.

Common Attribution

Common attribution means crediting payments made 

to a person or legal entity collectively to one limitation 

due to a unique or specific relationship between the 

persons or legal entities. Common attribution applies 

to a minor child and a parent or legal guardian; and a 

parent organization over a secondary organization 

when the parent organization exercises control over the 

secondary organization.

Ownership Interest for Direct Attribution

For the purposes of the direct attribution of payments, 

ownership interest that a person or legal entity holds in 

a legal entity on June 1 of the current year is used. 

Direct attribution of payments is not applicable to 

cooperative associations of producers. The payments 

will instead be attributed to the members of the 

association that produced the commodities marketed 

by the association on behalf of the members.

Minor Child Rules

June 1 of the current year is the date a child is 

considered to be a minor for payment attribution 

purposes. Payments received both directly and 

indirectly by a minor child are attributed to the parent 

or legal guardian.

Payment Limits

Person - Payments made directly or indirectly to a 

person cannot exceed the annual amounts specified in 

the table on page 4.

Joint Operations and General Partnerships - Payments 

made directly or indirectly to a joint operation such as 

a general partnership, cannot exceed, for each payment 

specified in the table on page 4, the amount 

determined by multiplying the maximum payment 

amount specified for a program by the number of 

persons and legal entities that comprise the ownership 

of the joint operation. Payments to the joint operation 

will be reduced by an amount that represents the direct 

or indirect ownership in the joint operation by any 

person or legal entity that has reached the maximum 

limitation.

Legal Entities - Payments made directly or indirectly 

to a legal entity cannot exceed the annual amounts 

specified in the table on page 4. Payments made to a 

legal entity will be reduced by an amount that 

represents the direct or indirect ownership in the legal 

entity by any person or legal entity that has reached the 

maximum limitation.
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PAYMENT ELIGIBILITY AND PAYMENT LIMITATIONS - MAY 2019

USDA is an equal opportunity provider, employer and lender.

Payment Limitations

This table contains the annual payment limitations for a person or legal entity for programs that are subject to the 

provisions of the 2018 Farm Bill.

1/ Decouples the combined $125,000 payment limit for PLC, ARC, from Loan Deficiency Program (LDP) and Market Loan Gain (MLG)

 for covered commodities and peanuts.

 Beginning with crop year 2019, LDP’s and MLG’s are no longer subject to Payment Limitation or Payment Eligibility

 provisions, including “actively engaged in farming” and ‘cash-rent tenant’ provisions for covered commodities and peanuts. 

 ARC and PLC payment are subject to a combined annual limitation of $125,000.

2/ ECP payment limitation is increased from $200,000 per disaster event to $500,000 per disaster event.

3/ A separate maximum payment limitation is provided of $125,000 on NAP payments for losses to crops with catastrophic coverage and

 a $300,000 maximum payment limitation on NAP payments for losses to crops with buy-up coverage.

4/ The $125,000 payment limitation applicable to Emergency Assistance for Livestock, Honey Bees, and Farm Raised Fish Program

 (ELAP) payments is removed beginning in 2019. The $125,000 payment limitation applicable to the Livestock Indemnity Program

 (LIP) is removed effective January 1, 2017 and subsequent years. 

5/ TAP no longer has a dollar limitation; however, there is a per program year acreage limitation of 1,000 acres.

More information

For more information on FSA programs, eligibility and related information, visit fsa.usda.gov. 

Find your local USDA Service Center

To locate your local FSA office, visit farmers.gov/service-locator.

Program Payment Type

Commodity Programs

Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) - other than peanuts

 Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) - peanuts

Conservation Programs

Conservation Reserve Program (CRP) - annual rental payment and incentive payment

 Emergency Conservation Program (ECP) - per disaster event

 Emergency Forest Restoration Program (EFRP) - per disaster event

 Conservation Stewardship Program (CSP)

 Environmental Quality Incentives Program (EQIP)

 Agricultural Management Assistance (AMA)

Disaster Assistance Programs

Livestock Forage Disaster Program (LFP)

 Noninsured Crop Disaster Assistance Program (NAP)

 Tree Assistance Program (TAP)

Per person or Legal Entity

(or producer for TAP)

Per Year Limitation Amount

2019 Through 2023

$125,000 1/

$125,000 1/

$50,000

$500,000 2/

$500,000

$200,000

$450,000

$50,000

$125,000 4/

$125,000/$300,000 3/

1,000 acres 5/