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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.

Additional Payment Eligibility 

Requirements

Each partner, stockholder or member with an ownership 

interest must contribute active personal labor and/or 

active personal management to the farming operation 

on a regular basis. 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. 

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.

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 

FACT SHEET

April 2021

Payment Eligibility and Payment 

Limitations

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Foreign Persons

Foreign persons, other than registered aliens, are not 

eligible to receive certain 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 its 

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 that can be received annually for each program, 

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.

Program payments made directly to a legal entity 

are attributed to those persons who 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 party 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.

There is an exception allowed for legal entities, such 

as corporations, if total direct payments received 

both directly and indirectly by the legal entity and its 

members do not exceed $125,000.

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.

Cash Rent Tenants

A cash-rent tenant is ineligible to receive payments on cashrented 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.

PAYMENT ELIGIBILITY & PAYMENT LIMITATIONS - APRIL 2021

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PAYMENT ELIGIBILITY & PAYMENT LIMITATIONS - APRIL 2021

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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.

Changes to Farming Operations

Changes to a farming operation resulting in an increase 

in the number of persons to whom payment limitation 

applies require the farming operation to also meet 

“substantive change requirements.” 

Such requirements include:

• Addition of a family member

• Changing from cash rent to share rent

• 20 percent increase in land used for agricultural 

production

• Change in ownership by sale or gift of equipment

• Change in ownership by sale or gift of land or 

livestock

Without a qualifying change, the newly added persons 

will be determined ineligible for program benefits.
PAYMENT ELIGIBILITY & PAYMENT LIMITATIONS - APRIL 2021

USDA is an equal opportunity provider, employer, and lender. 4

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.

Program Payment Type

Per person or Legal Entity 

(or producer for TAP) Per 

Year Limitation Amount 2019 

Through 2023

Commodity Programs

Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) – 

other than peanuts

$125,000 1/

Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) – 

peanuts

$125,000 1/

Conservation Programs

Conservation Reserve Program (CRP) – annual rental payment 

and incentive payment

$50,000

Emergency Conservation Program (ECP) – per disaster event $500,000 2/

Emergency Forest Restoration Program (EFRP) – per disaster 

event

$500,000

Conservation Stewardship Program (CSP) $200,000

Environmental Quality Incentives Program (EQIP) $450,000

Agricultural Management Assistance (AMA) $50,000

Disaster Assistance Programs

Livestock Forage Disaster Program (LFP) $125,000 4/

Noninsured Crop Disaster Assistance Program (NAP) $125,000/$300,000 3/

Tree Assistance Program (TAP) 1,000 acres 5/

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) was 

 removed in 2019. The $125,000 payment limitation applicable to Livestock Indemnity Program (LIP) was removed in 2017. 

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-center-locator.