If you’re applying for federal farm program payments in 2025, there are some important changes you need to know about. These updates affect who qualifies for payments, how much you can receive, and which types of farm operations are now treated the same under the rules.
Here’s a simple breakdown of what’s changed and what it means for your farm.
You Still Have to Be Actively Engaged in Farming
First things first: To receive payments under USDA’s Title I commodity programs — like Price Loss Coverage (PLC), Agriculture Risk Coverage (ARC), and others — you must be actively engaged in farming. That’s not new.
This means you (or someone in your operation) must regularly provide either:
- Active personal labor (working on the farm yourself),
- Active personal management (making day-to-day decisions),
- Or both.
The USDA also requires that your contribution be real and measurable — it must be separate from what others are doing, and you need to be able to document it.
LLCs, S Corps, and Limited Partnerships Now Get Equal Treatment
Here’s one of the biggest changes: In the past, general partnerships and joint ventures had a unique rule that allowed each individual partner to qualify for payments — as long as they personally contributed labor or management.
Now, that same rule applies to LLCs, S corporations, and limited partnerships too. That means:
If you’re part of an LLC, an S corp, or a limited partnership, and you personally help manage or work on the farm, you may individually qualify for payments — just like partners in a general partnership always could.
This change is especially important for family farms and multi-member farm businesses that are structured as LLCs or S corps. It gives everyone in the operation a fairer shot at support, so long as they’re involved in running the farm.
Payment Limits Increased and Tied to Inflation
Another farmer-friendly update: The maximum amount you can receive under these commodity programs is increasing.
- Old limit: $125,000
- New limit (2025): $155,000
- Future years: Will adjust annually for inflation
That’s a meaningful increase, especially in today’s high-cost environment. More money is now available to farms that qualify — a welcome shift for producers dealing with tight margins.
Program Benefits Expanded Across the Board
On top of the structural changes, Congress also boosted support in several key areas:
- Marketing loan rates are up, helping farmers when market prices dip below support levels.
- Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) offer more robust protection for eligible crops.
- Crop insurance benefits were improved as well, providing stronger risk management tools for weather and price swings.
While the details vary by crop and region, these updates aim to provide more stability and support to producers facing market volatility and rising input costs.
What You Should Do Next
If you’re running a farm operation — especially one structured as an LLC, S corp, or limited partnership — it’s a good time to:
- Review your business structure and documentation. Make sure you can show your personal labor or management contributions.
- Restructure general partnerships. If your farm business is structured as a general partnership, consult your attorney about converting to an LLC to enhance your business’s liability protection.
- Talk to your FSA office or crop insurance agent. They can explain what these changes mean for your operation specifically.
- Stay organized. Document your activities and contributions clearly — the USDA may require proof if you’re claiming active engagement.
If you have questions or need assistance, contact us, and we will develop an individually tailored game plan for your farm.
Tagged In:Company Formation and Business PlanningCorporate and BusinessFederal Farm Program