USDA: Earnings will define family farm

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According to a USDA proposal, if your gross annual income is more than $750,000 you will no longer be considered a family farm in terms of government loan programs.

This new family farm definition was developed as part of the agency’s efforts to streamline the Farm Service Agency’s Direct Farm Loan Programs. According the proposed rule change listed in the February 9 issue of the Federal Register, family farms would be defined as those with an annual gross income less than $750,000, or not in the top 5 percent in their state for gross annual income. The comment period on this proposal has just been reopened until May 4.

This type of restrictive definition for a family farm is unfairly biased against producers of high-value crops and livestock products such as dairy, fruit, vegetable, and nursery stock producers, says Chris Galen, vice president of communications for the National Milk Producers Federation.

NMPF estimates that a dairy with about 230 cows would bump up against the $750,000 cap. In addition, the other exclusion — not in the top 5 percent in their state for gross annual income — would exclude more than half of the dairy farms in California, Arizona and Colorado.

“If this definition of family farms goes on the books,” says Galen. “Then who is to stop it from being used as a precedent for possible future income caps on all other USDA farm programs such the Milk Income Loss Contract program.”

The FSA loan programs provide about $750 million or so in direct loans to family farms every year, and another $2.5 billion in loan guarantees. If this definition is passed it will make producers choose between expanding their business to remain competitive or stay small in order to qualify for government programs.

The NMPF is one of several farm organizations that sent a letter to USDA urging them to withdraw the proposed definition of a “family farm.” To view that letter, click here.

The proposal is open for public comment until May 4. To voice your opinion, go to: http://www.regulations.gov/AGCY_FARMSERVICEAGENCY.cfm

NMPF, Associated Press



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