CFAP 2 Payment Dispute: Receivership adn Active Farming Status
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A recent court case, Chinn, Thrasher & Thrasher Farm partnership v. U.S. Department of Agriculture (Case No. 2:24-CV-0055 PLC), highlights the complexities of eligibility for Coronavirus Food Assistance Program 2 (CFAP 2) payments, particularly when a farm is under receivership. The U.S. District Court for the Eastern District of Missouri granted summary judgment in favor of the Department of Agriculture, affirming it’s denial of CFAP 2 payments to the plaintiff.
Background of the Case
The dispute arose after a farm partnership defaulted on loans secured by its livestock. A receiver was appointed to manage the farm’s assets, including the liquidation of livestock and rejection of leases. The receiver subsequently applied for CFAP 2 payments on behalf of the partnership. Initially denied due to the farm not being actively engaged in farming, the situation changed when one of the partners entered into contracts to acquire new livestock.
The Court’s Ruling
Despite the partner’s efforts to restock, the Department of Agriculture maintained that the farm was not actively engaged in farming.The court agreed with this assessment, stating that the partner’s actions were insufficient to qualify the farm for CFAP 2 payments while it remained under receivership. The court found that simply entering into contracts for new livestock,while under the control of a receiver,did not demonstrate active farming operations.
Key Takeaway: Active Engagement in Farming
This case underscores the importance of demonstrating active engagement in farming to qualify for federal agricultural assistance programs like CFAP 2. The ruling clarifies that a farm under receivership cannot easily re-establish eligibility through actions taken by partners alone. Active farming requires more than just the intent to farm; it necessitates actual operation and management of a farming enterprise.
Chinn, thrasher & Thrasher Farm Partnership v. U.S. Department of Agriculture (MLW No. 84197/ Case No. 2:24-CV-0055 PLC – 13 pages) (U.S. District Court, Eastern district of Missouri, Cohen, J.)