SB984 amends the Food Security Act of 1985 to carve out an exception to statutory payment limits for any person or legal entity whose average adjusted gross income is at least 75 percent from farming, ranching, or silviculture activities. The exception applies during the relevant crop, fiscal, or program year and explicitly lists agritourism, direct-to-consumer sales, and the sale of agricultural equipment owned by the producer as qualifying activities, while preserving an agency role to define other agriculture-related income.
Practically, the bill narrows the reach of payment caps for two categories of existing benefits (identified in the bill by their statutory citations). For practitioners and compliance officers, it creates a bright-line income-share threshold to test eligibility, shifts certain verification responsibilities to USDA, and raises both fiscal and program-integrity questions about how nontraditional farm income will be treated and audited.
At a Glance
What It Does
The bill adds a new exception to the payment-limit provision in 7 U.S.C. 1308–3a(b) so that the paragraph (1) cap does not apply when at least 75% of a person’s or entity’s average adjusted gross income is derived from agriculture-related activities in the applicable year. It names specific qualifying activities and refers to benefits under two statutory authorities.
Who It Affects
Producers, farm-owned entities, and timber operations whose taxable income is predominantly agricultural; USDA/Farm Service Agency staff charged with eligibility and payment administration; and taxpayers funding disaster and commodity programs covered by the cited statutes.
Why It Matters
The measure prioritizes income-based need over strict per-person caps, potentially increasing payments to production-dependent farms and entities while creating new verification and fiscal-exposure issues for program administrators and budget analysts.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
SB984 changes how payment limits work for certain farm and disaster program benefits by adding an explicit exception for producers and farm entities that are overwhelmingly reliant on agriculture for their income. Instead of disqualifying or capping payments simply because a person or entity would exceed the statutory per-person limit, USDA would not apply that cap if 75 percent or more of the individual’s or entity’s average adjusted gross income comes from farming, ranching, silviculture, and similar activities.
The bill names several activities that count toward the 75 percent test—agritourism, selling directly to consumers, and selling agricultural equipment the producer owns—and leaves room for the Secretary of Agriculture to identify other agriculture-related income. The exception is applied on a crop, fiscal, or program-year basis as appropriate to the payment type, meaning eligibility can vary year-to-year depending on income composition.The statutory change targets payments authorized under two specified authorities (the subtitle E payments in the 2014 Agricultural Act and section 196 of the 1996 reform act).
By focusing on income origin rather than entity form, the bill would allow corporations, partnerships, and other legal entities that are principally agricultural in activity to avoid the payment cap where they otherwise would have hit it. That shifts USDA’s work from counting affiliations and land ownership structures toward verifying income sources and calculating the relevant average adjusted gross income used for the test.Implementation will require USDA to issue definitions and guidance on what evidence counts, how to compute the ‘average adjusted gross income’ for multi-year averages and multi-member entities, and how to treat borderline or mixed-income operations.
The agency will also need to align verification processes for tax data, farm records, and nontraditional revenue streams like agritourism receipts so it can apply the exemption consistently across programs.
The Five Things You Need to Know
The bill inserts a new paragraph (4) into 7 U.S.C. 1308–3a(b) creating an exception to the paragraph (1) payment limitation when at least 75% of average adjusted gross income is from agriculture-related activities.
Qualifying activities expressly include farming, ranching, silviculture, agritourism, direct-to-consumer marketing of agricultural products, and sales of agricultural equipment owned by the person or entity.
The exception applies for the applicable crop, fiscal, or program year—so eligibility can change from year to year based on income composition.
SB984 limits its carve-out to payments or benefits provided under subtitle E of title I of the Agricultural Act of 2014 (7 U.S.C. 9081) and section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).
The bill gives the Secretary of Agriculture authority to determine what other agriculture-related activities count toward the 75% income threshold, creating administrative discretion for USDA.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Declares the Act’s short name as the 'Fair Access to Agriculture Disaster Programs Act.' This is purely formal but indicates the bill’s focus on disaster and other farm program accessibility.
Technical amendment to cross-references
Modifies the existing cross-reference structure in section 1001D(b) of the Food Security Act of 1985 so that the newly added exception can be referenced properly. Practically this prevents later drafting errors and ensures paragraph numbering accommodates the new paragraph.
75% agriculture-income exception to payment limits
Adds a substantive new paragraph establishing that the payment-limit in paragraph (1) does not apply when not less than 75% of a person’s or legal entity’s average adjusted gross income derives from specified agriculture-related activities. It lists qualifying activities (agritourism, direct-to-consumer sales, sale of agricultural equipment owned by the person or entity) and explicitly delegates to the Secretary the authority to identify additional qualifying agriculture-related income. The provision ties the exception to two specific statutory program authorities, which limits the carve-out to certain disaster and related payments rather than to all farm program payments.
This bill is one of many.
Codify tracks hundreds of bills on Agriculture across all five countries.
Explore Agriculture in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Family farms and ranches with limited nonfarm income: Producers whose taxable income is dominated by on-farm receipts gain continued access to full payments even if they would otherwise exceed per-person caps.
- Specialty and direct-market producers: Farmers who rely heavily on direct-to-consumer channels or agritourism will be able to count those receipts toward the 75% test and avoid payment limits.
- Farm-owned corporations and LLCs structured as legal entities: Entities that meet the income threshold will not be blocked by per-person caps that sometimes penalize incorporated operations.
Who Bears the Cost
- USDA/Farm Service Agency (FSA): The agency will face increased verification and administrative workload to calculate average AGI, adjudicate borderline cases, and issue guidance—potentially without dedicated additional resources.
- Federal budget/taxpayers: Narrowing payment limits for qualifying producers may increase program outlays for the cited payments during years when many producers meet the 75% test.
- Program integrity units and auditors: Inspectors and auditors will need to develop methods to detect gaming (e.g., recharacterizing nonfarm income) and to corroborate nontraditional farm receipts, raising enforcement complexity and cost.
Key Issues
The Core Tension
The bill trades the blunt instrument of per-person payment caps for an income-origin test intended to concentrate aid on those economically dependent on agriculture; that prioritizes targeted relief but opens the door to definitional disputes, verification burdens, and potential increases in program spending—forcing a choice between administrative simplicity/equity and income-targeted flexibility.
Two implementation risks dominate. First, measuring a producer’s or entity’s 'average adjusted gross income' in a way that is administrable and resistant to manipulation is difficult.
Tax-based measures are authoritative but lag fiscal year timing and may not capture informal agritourism or direct-sales receipts unless producers report them consistently; tying eligibility to multi-year averages raises timing and appeal issues. Second, the list of qualifying activities mixes clearly agricultural activities with lines of business that sometimes resemble nonfarm enterprises (e.g., agritourism or the sale of equipment).
That mix creates room for disputes over whether particular receipts are legitimately 'agriculture-related' or are business income that should not count toward the threshold.
A related tension is the delegation of definitional authority to the Secretary. That gives USDA necessary flexibility to adapt definitions, but it also creates uncertainty for producers until formal rulemaking or guidance issues.
The combination of a high threshold (75%) and delegated definitions could produce uneven outcomes: some producers with similar revenue mixes might qualify in one year but not another depending on administrative interpretation or audit outcomes. Finally, limiting the exception to two statutory payment authorities narrows fiscal exposure but may produce inconsistent treatment across other Commodity Credit Corporation or disaster-related programs, prompting appeals and calls for further statutory fixes.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.