New Payment Limits Support Farm Entities

By Scout Nelson

During the summer of 2025, Congress passed legislation titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14,” widely known as the One Big Beautiful Bill. The law introduced several changes to federal farm programs, including major updates to payment limits for farm business entities.

Under earlier rules, farm operations organized as business entities, such as limited liability companies, corporations, or partnerships, were treated as a single person by the Farm Service Agency. Because of this policy, these operations were limited to a single payment cap of $125,000 for programs such as Agricultural Risk Coverage and Price Loss Coverage, regardless of how many owners were part of the operation.

This system created challenges for farms with multiple active members. Even when several individuals were involved in managing and operating the farm, the total support received remained limited to one payment cap. This approach often restricted the financial help available to growing or multi-owner farm businesses.

The new law revised this structure beginning with the 2025 crop year. Payments scheduled to be issued after October 1, 2026, were set to follow updated rules. Under these changes, qualified pass-through business entities became eligible for separate payment limits for each member.

To qualify for these separate limits, everyone within the business entity was required to meet the “actively engaged in farming” standard. This requirement helped ensure that payment benefits were directed only to those who took part in real farming activities and management decisions.

These updates were designed to improve fairness across federal farm programs. The revised rules recognized that modern farm operations often involved multiple active partners who shared responsibilities, labor, and financial risk. By allowing separate payment limits, the policy better reflected how farms operated in today’s agricultural economy.

Overall, the updated payment structure strengthened program access for business farm entities, improved financial stability, and supported long-term agricultural growth. The new law provided better support for farms that relied on cooperative ownership models while maintaining clear rules to protect program integrity.

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