In 2014, Congress passed the Agricultural Act of 2014 (the “Act”), more commonly known as the ‘Farm Bill,’ which included many significant changes. According to the U.S. Department of Agriculture, these new provisions are designed to provide “flexibility, accountability, and adaptability at the local level.” To effectuate that purpose, the Act consolidated some conservation programs and added conservation compliance requirements for producers receiving federal crop insurance subsidies. Starting June 1, 2015, all producers, including specialty crop farmers, must be in compliance with federal conservation regulations in order to receive federal crop insurance subsidies. The new amendments to the Act will impact tens of thousands of producers who will now have to certify their compliance with the federal regulations.
Previously, the compliance requirements applied only to producers of traditional crops; however, now all producers, including specialty crop farmers, who purchase crop insurance will be obligated to satisfy the compliance requirements in order to receive subsidies. Importantly, this compliance requirement applies to all farming operations by a producer or its affiliates. If a producer owns several farms, each farm must be in compliance—even if the producer has crop insurance on only one of the farms. Persons affiliated with a producer must also file the required compliance certification in order for the producer to receive the federal subsidies.
Every producer not subject to an exemption will have to file a Highly Erodible Land Conservation and Wetland Conservation Certification before the June 1, 2015 deadline. Producers who do not file the certification before the deadline will not be eligible for premium support on their crop insurance. The certification, in part, requires producers to agree not to (1) farm agricultural commodities on highly erodible land without an approved conservation plan or system; (2) farm agricultural commodities on converted wetlands; and (3) convert wetlands by draining or otherwise affecting the flow of water to allow production of an agricultural commodity. The Act defines an “agricultural commodity” as any crop planted or produced by annual tilling of the soil. Ultimately, the National Resources Conservation Service (NRCS) makes technical determinations regarding compliance. Still, producers must complete the appropriate certification before receiving federal crop insurance subsidies.
These new compliance requirements create additional steps for producers to take in order to receive federal crop insurance and producers should begin compliance efforts immediately to ensure that they are eligible for federal premium assistance before the June 1, 2015 deadline. For more information on these compliance requirements and for assistance in meeting them, contact any member of Smith Haughey Rice & Roegge’s Agriculture and Agribusiness Industry Team.
Smith Haughey’s Agriculture & Agribusiness Industry Team serves farmers, producers and food processors throughout Michigan, serving as a one-stop solution for the unique legal issues facing agricultural clients.