The U.S. Department of Agriculture’s Farm Service Agency has announced major changes to payment eligibility and payment limitation rules that could allow more farmers and ranchers to receive larger federal farm program payments beginning with the 2026 crop year.
According to USDA, the changes are designed to give producers greater flexibility when structuring their farm operations while maintaining access to federal farm safety-net programs.
“The 2026 program year will be a monumental change for farmers and ranchers,” said FSA Administrator Bill Beam. “Producers have had to make difficult decisions for far too long when it comes to structuring their operations.”
One of the biggest changes affects farms organized as limited liability companies (LLCs) and S-Corporations.
Starting with the 2026 crop year, qualifying LLCs, S-Corps, partnerships, and joint ventures will be treated similarly for payment eligibility purposes.
Previously, many LLCs and S-Corps were limited to a single payment limitation regardless of the number of actively involved members.
Under the new rules, each member who meets USDA’s “actively engaged in farming” requirements can help the operation qualify for expanded program payments.
Farm operations organized as LLCs, S-Corps, or other newly qualified pass-through entities must file updated farm operating plans with FSA by Sept. 15, 2026, to take advantage of the changes.
USDA also announced an increase in payment limits for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs.
Beginning with the 2025 crop year, the payment limit will rise from $125,000 to $155,000 and will be adjusted annually for inflation.
Additional changes broaden the definition of farming income when determining eligibility for certain conservation and disaster assistance programs.
The updated definition now includes income from agri-tourism activities, direct-to-consumer sales, and some equipment sales.
As a result, more diversified farm operations may qualify for exemptions from the $900,000 adjusted gross income cap that applies to some USDA programs.
USDA officials say the changes, authorized through the Working Families Tax Cuts Act, are intended to strengthen the farm safety net while giving producers more options to protect and grow their operations for future generations.
