The FSA (Farm Service Agency) made $292.5 billion in subsidies from 1995 to 2012, according to the EWG (Environmental Working Group). Farm subsidies are part of the agricultural system that provides a form of insurance against various events that may affect the US food supply such as severe drought, flood or other market event. If you want to obtain a US Farm Subsidy, you must meet certain eligibility requirements.
Crops Eligible for Subsidy
According to the FSA, subsidies are primarily provided for five major food groups, including corn, soybeans, wheat, cotton and rice. Your farm may also be eligible for subsidies if you harvest peanuts, sorghum and mohair. Dairy and sugar are generally not eligible. However, there may be state-specific programs or grants available.
One of the most important qualifications for eligibility, according to the FSA, is being actively engaged in farming. This refers to the activity level of the people or organizations contributing to the farm. These contributions can be in the form of manual labor, land, farming equipment or the capital used to acquire or pay for these items. In general, the degree of eligibility is a function of these contributions being "at risk." If your farm is in danger due to the lack of any of these contributions, you may be eligible for a subsidy.
Average Gross Income
The US Government Accountability Office requires the FSA to maintain a rigorous verification process. In order to qualify for subsidies, you must also meet certain income eligibility requirements. According to the FSA, individuals that make more than $500,000 for commodity programs, $750,000 for average farms and $1 million for all income -- which includes both farm and non-farm income -- are not eligible for payments. To qualify, you must provide proof of your adjusted gross income by filling out several forms, which are available on the FSA website.
Another requirement to receive subsidies is centered around wetland conservation. Farmers must agree to not produce crops on highly erodible land or converted wetland. Additionally, a person that has been convicted of a controlled substance violation is ineligible to receive funds for five years.
Sharon Barstow started her career in investment banking and then crossed over to the world of corporate finance as a financial analyst. She specializes in banking and corporate finance topics to include treasury management, financial analysis, financial statement analysis, corporate finance and FP&A. In addition to writing, she is the co-owner of a small dog bakery in rural Ohio.