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Farm bill changes expand legal entities and family eligibility for commodity programs

While most of the focus on the House farm bill is on changes to nutrition programs, a new kerfuffle has cropped up over changes to farm programs that would benefit LLCs, S corporations and farmers who want to enroll cousins, nieces and nephews for commodity payments. The changes, if they become law, would expand the eligibility of pass-through entities for farm-program payments to include limited-liability corporations and S-corps, as a way to avoid adjusted gross income caps for commodity payments. Currently, joint ventures and general partnerships are not subject to payment limits or income means testing. New language would expand those provisions for LLCs and S-corps.In a response to DTN, House Agriculture Committee GOP staff stated there have been several examples of farmers forming LLCs based on advice of attorneys who did not understand the impact of limiting the entire farm to a single $125,000 payment limit. In at least some instances, that failed decision on which entity to form has led to bankruptcies, committee staff wrote in an email. The National Sustainable Agriculture Coalition came out aggressively Monday against the new language in the farm bill, stating the changes would "pave the way for further farm consolidation."Ferd Hoefner, a policy analyst for NSAC, said some of the language in the House bill would go "back to the days of the full-on Mississippi Christmas Tree."Hoefner said in an interview, "It's just a complete evisceration of means testing and payment limits."

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The Progressive Farmer
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