Under the proposed rule, non-family joint ventures and general partnerships must document that their managers are making significant contributions to the farming operation, defined as 500 hours of substantial management work per year, or 25 percent of the critical management time necessary for the success of the farming operation. Many operations will be limited to only one manager who can receive a safety-net payment. Operators that can demonstrate they are large and complex could be allowed payments for up to three managers only if they can show all three are actively and substantially engaged in farm operations. The changes specified in the rule would apply to payment eligibility for 2016 and subsequent crop years for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) Programs, loan deficiency payments and marketing loan gains realized via the Marketing Assistance Loan program.It's been a while since the 1985 farm bill, which I think may have been the first time "actively engaged" was used in payment limitation language. As I've blogged before, I remember the DC bureaucrats trying to comprehend the statutory language and come up with regulations and handbook instructions. Was that when the "left hand" and "right hand" first entered the picture (a farmer had to contribute labor, management, capital, equipment, etc. to the operation, but not all of them so we tried to clarify which combinations would qualify by using the two categories). Anyhow, after long effort ASCS got the rules out and the training prepared only to have enough big shots exert enough influence on their Congressional representatives to force ASCS to reverse directions. Again, if memory serves, and it's less reliable these days, the biggest loophole was managerial contribution: in effect, if John Goldbrick Doe, living as a beach bum in Key West, but one of the heirs to Sam Hardworking Farmer Doe, participated in a conference call with the other heirs and agreed to a share lease of the inherited land to Joe Dirty Hands Farmer, JGDoe could get a share of the payments. (I may be exaggerating.)
The bottom line is "actively engaged" is a judgment call, and there's a Heisenberg principle at work: issue a regulation and the lawyers will change the reality, at least the legal reality, so the regulation won't work as it was originally intended.
Sen. Grassley has said the FSA proposal isn't as tough as he proposed. We'll see if it survives the comment period.
PS: this issue shows the irrelevance of the President to much bureaucratic work.