	Introduction

Program eligibility requirements and payment limits are central to how various U.S. farm programs operate. Congress first added payment limits as part of farm commodity programs in the 1970 farm bill (P.L. With each succeeding farm bill, Congress has addressed anew who is eligible for farm payments and how much an individual recipient should be permitted to receive in a single year. In recent years, congressional debate has focused on 
attributing payments directly to individual recipients; ensuring that payments go to persons or entities currently engaged in farming; capping the amount of payments that a qualifying recipient may receive in any one year; and excluding farmers or farming entities with incomes above a certain level as measured by their adjusted gross income (AGI) from payment eligibility. Discussed below are cross-cutting eligibility requirements that affect multiple programs, including participant identification, foreign ownership, nature and extent of participation (i.e., actively engaged in farming criteria), means tests, and conservation requirements. Actively Engaged In Farming (AEF) Requirement

To be eligible for certain Title I commodity program benefits, participants—individuals as well as other types of legal entities—must meet specific requirements concerning their "active participation" in the farming operation. Foreign Person or Legal Entity

Generally, if a foreign person or legal entity meets a particular farm program's eligibility requirements, then they are eligible to participate. One exception is the four permanent disaster assistance programs—Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP); Livestock Forage Disaster Program (LFP); Livestock Indemnity Program (LIP); and Tree Assistance Program (TAP)—and the noninsured crop disaster assistance program (NAP), which explicitly prohibit payments to foreign entities, other than resident aliens. Direct Attribution of Payments

The process of tracking payments to an individual through various levels of ownership in single and multi-person legal entities is referred to as "direct attribution." It is this accumulation of an individual's payments—tracked through four levels of ownership in multi-person legal entities—that is subject to the annual payment limit. Several major farm support programs—as defined by specific titles of the 2014 farm bill—are currently subject to annual payment limits. Economically, they contend that large payments facilitate consolidation of farms into larger units, raise the price of land, and put smaller, family-sized farming operations and beginning farmers at a disadvantage. Politically, they believe that large payments undermine public support for farm subsidies and are costly. Critics of payment limits (and thus supporters of higher limits or no limits) counter that all farms are in need of support, especially when market prices decline, and that larger farms should not be penalized for the economies of size and efficiencies they have achieved. They say that farm payments help U.S. agriculture compete in global markets, and that income testing is at odds with federal farm policies directed toward improving U.S. agriculture and its competitiveness. For example, new eligibility requirements or tighter payment limits may result in 
a reorganization of the farm operation to increase the number of eligible persons, or to lower the income that counts against a new AGI limit or the farm program payments that count against a smaller payment limit; a change in the crop and program choices or marketing practices, for example, to take advantage of the absence of a payment limit on MAL certificate exchange gains and forfeitures benefits; or a change in land use, such as, instead of farming the same acreage, renting out or selling some land to farmers that have not hit their payment limits.
Current U.S. farm program participants—whether individuals or multi-person legal entities—must meet specific eligibility requirements to receive benefits under certain farm programs. Some requirements are common across most programs while others are specific to individual programs. In addition, program participants are subject to annual payment limits that vary across different combinations of farm programs. Federal farm support programs, along with their current eligibility requirements and payment limits, are listed in Table 1.
Since 1970, Congress has used varying policies to address the issue of who should be eligible for farm payments and how much should an individual recipient be permitted to receive in a single year. In recent years, congressional policy has focused on tracking payments through multi-person entities to individual recipients (referred to as direct attribution); ensuring that payments go to persons or entities actively engaged in farming; capping the amount of payments that a qualifying recipient may receive in any one year; and excluding farmers or farming entities with large average incomes from payment eligibility.
Current eligibility requirements that affect multiple programs include identification of every participating person or legal entity—both U.S. and non-U.S. citizens; the nature and extent of an individual's participation (i.e., actively engaged in farming criteria) including ownership interests in multi-person entities and personal time commitments (whether as labor or management); means testing—persons with combined farm and nonfarm adjusted gross income (AGI) in excess of $900,000 are ineligible for most program benefits; and conservation compliance requirements.
In general, if a foreign person or legal entity meets a program's eligibility requirements, then they are eligible to participate. One exception is the four permanent disaster assistance programs created under the 2014 farm bill (P.L. 113-79) and the noninsured crop disaster assistance program (NAP) whereby non-resident aliens are excluded.
The process of tracking payments to an individual through various levels of ownership in single or multi-person legal entities is critical for assessing an individual's cumulative payments against their annual payment limit. Current law requires direct attribution through four levels of ownership in multi-person legal entities. Current payment limits include a cumulative limit of $125,000 for all covered commodities under major Title I revenue support programs, with the exception of peanuts, which has its own $125,000 limit. The permanent disaster assistance programs also have a $125,000 per crop year limit, with some exceptions.
Supporters of payment limits contend that large payments facilitate consolidation of farms into larger units, raise the price of land, and put smaller, family-sized farming operations and beginning farmers at a disadvantage. In addition, they argue that large payments undermine public support for farm subsidies and are costly. Critics of payment limits counter that all farms need support, especially when market prices decline, and that larger farms should not be penalized for the economies of size and efficiencies they have achieved. Further, critics argue that farm payments help U.S. agriculture compete in global markets, and that income testing is at odds with federal farm policies directed toward improving U.S. agriculture and its competitiveness.
As part of the next farm bill debate, Congress may again address these concerns, as well as the following questions: How does policy design of payment limits relate to their distributional impact on crops, regions, and farm size? Is there an optimal aggregation of payment limits across commodities or programs? Do unlimited benefits under the marketing assistance loan program's forfeiture or commodity certificate exchanges reduce the effectiveness of overall payment limits?