---
kind: "section"
citation: "7 C.F.R. § 1400.201"
title: "7"
number: "1400.201"
heading: "General provisions for determining whether a person or legal entity is actively engaged in farming."
url: "https://uscodex.org/cfr/7/1400.201"
---

# §1400.201. General provisions for determining whether a person or legal entity is actively engaged in farming.

- (a) To be considered eligible to receive payments with respect to a particular farming operation, a person or legal entity must be actively engaged in farming with respect to the operation.
- (b) Actively engaged in farming means, except as otherwise provided in this part, that the person or legal entity:
  - (1) **Independently and separately makes a significant contribution to a farming operation of—**
    - (i) Capital, equipment, or land, or a combination of capital, equipment, or land and
    - (ii) Active personal labor or active personal management, or a combination of active personal labor and active personal management;
  - (2) Has a share of the profits or losses from the farming operation commensurate with the person's or legal entity's contributions to the operation; and
  - (3) Makes contributions to the farming operation that are at risk for a loss, with the level of risk being commensurate with the person's or legal entity's claimed share of the farming operation.
- (c) All of the following factors will be taken into consideration in determining if the person or legal entity is independently and separately contributing a significant amount of capital, equipment, or land, or a combination of capital, equipment, or land, to the farming operation:
  - (1) A separate and distinct interest in the land, crop, and livestock involved in the farming operation;
  - (2) The demonstration of separate and total responsibility for the interest in the land, crop, and livestock in the farming operation; and
  - (3) All funds and business accounts of the farming operation are separate from that of any other person and legal entity.
- (d) In determining if the person or legal entity is independently and separately contributing a significant amount of active personal labor or active personal management, all of the following factors will be taken into consideration:
  - (1) The types of crops and livestock produced by the farming operation;
  - (2) The normal and customary farming practices of the area;
  - (3) The total amount of labor and management necessary for the farming operation in the area; and
  - (4) For program year 2025 and prior years, whether the person or legal entity receives compensation for the labor and management activities.

## Notes

### Amendments

[73 FR 79273, Dec. 29, 2008, as amended at 85 FR 52039, Aug. 24, 2020; 91 FR 32885, June 2, 2026]

### Authority

Authority: 7 U.S.C. 1308, 1308-1, 1308-2, 1308-3, 1308-3a, 1308-4, and 1308-5; and Title I, Pub. L. 115-123.

### Source

Source: 73 FR 79273, Dec. 29, 2008, unless otherwise noted.

### Amendments

[73 FR 79273, Dec. 29, 2008, as amended at 85 FR 52039, Aug. 24, 2020; 91 FR 32885, June 2, 2026]