Arfb%20actively%20engaged%20comments

James Baxa Production, Emergencies and Compliance Division FSA, USDA, Stop 0501 1400 Independence Ave., SW Washington DC, 202050‐0501

Dear Sir:

Arkansas Farm Bureau Federation is the largest general farm organization in the state, representing over 190,000 member families. We appreciate the opportunity to comment on a proposal by the Farm Service Agency (FSA) to revise regulations on behalf of the Commodity Credit Corporation (CCC) to specify the requirements for a person to be considered actively engaged in farming for the purpose of payment eligibility for certain FSA and CCC programs.

We fully support the provisions in the farm bill that stipulate any proposed changes to actively engaged regulations only apply to entities that are non‐family general partnerships and joint ventures. We appreciate efforts by USDA to preserve the intent of Congress in the proposed regulations. However, the strict definition of family farms (in both the farm bill and the proposed regulation) will impact operations that are not solely comprised of lineal family members. We urge USDA to consider the circumstance where an eligible family operation becomes non‐lineal based on the death or retirement of a parent, grandparent, etc. We urge consideration by USDA for grandfathering the family exemption for such operations comprised of family members that share great‐grandparents. A family farm should not be forced out of eligibility as a result of family transitions or estate planning decisions that ensure the viability of the family farm.

We agree with the categories of management activities used to define “active personal management,” which includes providing and participating in activities considered critical to the profitability of the farming operation performed in one or more of these categories: capital, labor, and agronomics and marketing. Each of these areas is inextricably critical to a farm’s profitability. For this reason, we believe it is unnecessary and overly prescriptive to require a numeric based test for determining a “significant contribution” of active personal management.

The proposed requirement of performing at least 500 hours of management annually or 25 percent of the total management hours required for the farming operation on an annual basis is arbitrary and will create unintended inconsistencies for applying such a measurement.

Requirements to maintain management logs and meet arbitrary minimums are impractical and

would be a resource drain for farms. The proposed regulation includes these practices as significant management activities. Therefore, if a non‐family operation is required to meet a stricter management standard, a limit on the number of farm managers is unnecessary.

Invoking an arbitrary limit on the number of farm managers completely ignores the geographic and crop requirements of different types of farming operations.

If USDA ultimately chooses to impose a limit on the number of managers allowed, we believe the limit should be accompanied by a provision allowing for each state Farm Service Agency committee to waive or increase the limit in circumstances where the farming operation demonstrates the necessity of such management needs. Without providing some flexibility to accompany any proposed limit on the number of managers, USDA is ignoring the realities of today’s production agriculture and the significantly evolving and advanced role management decisions make in the profitability and sustainability of farms.

We also have concern about language in 1400.602 (e) clarifying that the significant contribution of a person’s active management may be used only to enable one person or entity in a farming operation to meet the requirements of being actively engaged in farming. Our specific concern pertains to the application of this provision for family operations which may have common family members in different entities such as corporations or LLCs. In the case of LLC’s, the spouse exemption for a husband or wife would be circumvented in cases where the couple are members of two limited liability corporations (LLC) in a partnership for legal liability purposes.

The spouse’s contribution of management could be limited to only one LLC, which we contend violates the tenet of the exemption from this regulation.

Thank you for the opportunity to comment on the proposed regulation. We appreciate the consideration of these comments as the regulation is finalized.