USDA’s Actively Engaged in Farming (AEF) Requirement

Summary: In 1987, Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203, §§1301-1307), which requires that an individual or legal entity be "actively engaged in farming" (AEF) to be eligible for federal commodity revenue support programs. AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. Designing a transparent and comprehensive AEF definition has proven difficult and has evolved over the years. The current set of laws and rules governing farm program eligibility—for both family and nonfamily members on farm operations—remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. In particular, critics contend that current U.S. Department of Agriculture (USDA) eligibility criteria—especially for providing active personal management—remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of new farm operation members simply to expand an operation's farm payment receipts.

Summary: Three major categories of legal entities are subject to AEF requirement for program payment eligibility: an individual, a partnership, and a corporation.

Summary: An individual must meet three specific AEF criteria. First, independently and separately from other individuals with an interest in the farm business, the person makes a significant contribution to the operation of: (a) capital, equipment, or land; and (b) active personal labor and/or active personal management. Second, the person's share of profits or losses is commensurate with his/her contribution to the farming operation. Third, the person shares in the risk of loss from the farming operation.

Summary: An individual that meets the AEF criteria is eligible for farm program payments but subject to annual payment limits. If a married person meets the AEF requirements, any spouse will also be considered to have met the AEF requirements, thus effectively doubling the individual payment limit. Also, every family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements and is eligible for a separate payment limit. Another exception to AEF requirements is made for landowners provided they receive income based on the farm's operating results.

Summary: A general partnership is an association of multiple persons whereby each member is treated separately and individually for purposes of determining eligibility and payment limits. A partnership's potential payment limit is equal to the limit for a single person times the number of persons or legal entities that comprise the operation's ownership and meet the AEF requirements. Thus, adding a new member can potentially provide an additional payment limit. A corporation is an association of joint owners that is treated as a single person for purposes of determining eligibility and payment limits, provided that the entity meets the AEF and other eligibility criteria. Adding a new member generally does not affect a corporation's payment limit but only increases the number of members that can share a single payment limit.

Summary: In accordance with a provision in the 2014 farm bill (P.L. 113-79; §1604), USDA added more specificity to the role that a nonfamily member of a partnership or joint venture must play to qualify for farm program benefits. However, considerable issues remain that may be of interest to Congress. Long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA's new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations.

The U.S. Department of Agriculture (USDA), under the authority of Congress as enunciated in periodic farm legislation, provides support to the U.S. farm economy through a variety of federal farm programs. Direct support can often involve the transfer of billions of dollars each year. For example, USDA's Commodity Credit Corporation (CCC) outlays on farm support programs have averaged $13.7 billion per year from 1996 through 2017.

Program payments vary across commodities and regions as well as by size of farm operations. This variation has generated considerable interest—by both the general public and Congress—in who is eligible to participate in farm programs and, thus, may receive payments. The concern over program eligibility also derives, in part, from instances where farm payments have accrued to individuals who have never engaged in farming.

Program eligibility requirements and payment limits are central to how many U.S. farm programs operate and how support dollars are distributed across the nation. In particular, eligibility requirements and payment limits determine who receives federal farm program payments and how much they receive. A number of statutory and regulatory requirements govern federal farm program eligibility for benefits under various programs. A key aspect of eligibility for major farm revenue support programs is the requirement that a person be "actively engaged in farming" (AEF)—that is, that a person contribute either labor or management time (or both) to the farm's operation. Not all farm programs are subject to the same AEF criteria, and the criteria often apply differently based on the type of legal entity owning the farm operation.

This is the first of two reports on the subject of program eligibility and payment limits. This report focuses on current requirements to successfully be determined as AEF and thus eligible for certain farm program payments. Another report (CRS Report R44739, U.S. Farm Program Eligibility and Payment Limits ) focuses on farm program payment limits, conservation compliance, and adjusted gross income (AGI) restrictions.

This report begins by briefly discussing the historical development of congressional efforts to define and tighten eligibility criteria for farm program payments. This is followed by a description of all of the key terms and concepts involved in defining a farm business and farm program payment recipient, including the three major types of farm business organizations (sole proprietorship, partnership, and corporation). Then the report discusses current requirements used to define a person or entity as being "actively engaged in farming" (AEF) by type of legal entity. This is followed by a description of a 2015 USDA rule—released subsequent to the 2014 farm bill ( P.L. 113-79 )—that clarifies what constitutes AEF for nonfamily members of a farming operation, how more than one nonfamily person may qualify as an active farm manager (subject to a limit of three farm managers), and the recordkeeping requirements necessary to meet this new criteria. Finally, the report discusses several issues that may be of potential interest to Congress concerning regulations governing the implementation and monitoring of AEF criteria.

A 2014 discussion of farm program payment limit and eligibility issues by farmdoc daily states:

Payment limits are a technical and legal issue. Any decision on the number of entities receiving payments should be made with due diligence, including careful consideration of the business and legal implications, and should be discussed with both the Farm Service Agency (FSA) and a lawyer who is an expert on payment limits.

This report is not a legal brief, nor does it represent a CRS legal analysis. Nor does this report intend to discuss the merits, or lack thereof, of federal farm program payments. Given its complexities, a review of U.S. farm program eligibility and annual payment limit policy can facilitate a conceptual understanding of issues of potential interest to Congress.

Congressional Efforts to Tighten Eligibility Criteria

The initial attempt to restrict payments to actual farmers was in 1987, when Congress enacted what is commonly known as the Farm Program Payments Integrity Act (Omnibus Budget Reconciliation Act of 1987, P.L. 100-203 , §§1301-1307). According to the Government Accountability Office (GAO), Congress was motivated to pass the Farm Program Payments Integrity Act after hearing several concerns about farm payments going to individuals not involved in farming. This law required that an individual or entity meet AEF criteria to receive farm commodity payments.

Since their establishment, AEF criteria have been a requirement for payment eligibility for most farm revenue support programs. Since 1996, an average of about $9 billion per year in farm support program payments have been subject to the AEF criteria. Thus, significant taxpayer resources are at stake. However, designing a transparent and comprehensive definition of what it means to be AEF has proven difficult.

In 2004, GAO contended that USDA regulations failed to specify a measurable standard for what constituted "a significant contribution of active personal management." Furthermore, GAO argued that, by not specifying such a measurable standard, USDA allowed individuals with little or no involvement in a farming operation to qualify for payments.

As a consequence of such criticism, the definition of AEF has evolved over the years as Congress and USDA—via its regulatory powers—have attempted to tighten payment eligibility criteria. For example, the 2008 farm bill ( P.L. 110-246 ) added more specificity to the definition of person and legal entity . It limited qualifying payments via direct attribution to persons or legal entities with ownership interests in joint ventures that pooled the resources of multiple payment recipients. It also expanded a separate payment limit to the spouses of qualifying farm payment recipients. Yet GAO continued to argue that further specificity was needed for AEF criteria.

The 2014 farm bill ( P.L. 113-79 , §1604) required USDA, in new regulations, to add more specificity to the role that a nonfamily producer who is a member of a legal entity—primarily a partnership or joint venture—must have to qualify for farm program benefits.

In general, family farms receive special treatment in which every adult family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements. Prior to the 2018 farm bill, family membership was based on lineal ascendants or descendants but was also extended to siblings and spouses. The 2018 farm bill (§1703) further extended the definition of family member to include first cousins, nieces, and nephews. As a result, the current set of laws and rules governing farm program eligibility—particularly for family members of a farm operation—remain subject to considerable scrutiny and criticism from both rural and farm advocacy groups as well as certain Members of Congress. Critics contend that current USDA eligibility criteria—especially for providing active personal management—remain broad and subjective and may represent a low threshold to qualify for payments, thus facilitating the creation of partnership members to increase the farm business's payment limit and expand its farm payment receipts.

Three Principal Farm Business Categories

Many types of farm business entities own and operate some sort of agricultural production activity. For purposes of determining the extent to which the participants of a farm operation qualify as potential farm program participants, three major categories are considered ( Table 1 ).

1. Sole proprietorship or family farm . The farm business is run by a single operator or multiple adult family members—the linkage being common family lineage—where each qualifying member is subject to an individual payment limit. Thus, a family farm potentially qualifies for an additional payment limit for each family member (18 years or older) associated with the principal operator who participates in the farming operation. Family farm or sole proprietorships comprised nearly 87% of U.S. farm operations in 2012. 2. Joint operation . Each member is treated separately and individually for purposes of determining eligibility and payment limits. Thus, a partnership's potential payment limit is equal to the number of qualifying members (plus any special exemptions such as spouses) times the individual payment limit. 3. Corporation. A legally defined association of joint owners or shareholders that is treated as a single person for purposes of determining eligibility and payment limits. This includes corporations, limited liability companies, and similar entities. Most incorporated farm operations are family held.

These three categories represent over 98% of U.S. farm operations ( Table 1 ). Special rules exist for evaluating both the eligibility of and relevant payment limits for institutional and other exceptional types of potential legal entities. However, because of their small number (less than 2% of U.S. farm operations) and unique nature, they are not discussed further in this report.

Generally, program eligibility begins with identification of participants. Identifying who or what is participating and therefore how payments may be attributed is the cornerstone to most farm program eligibility. To be eligible to receive any farm program payment, every person or legal entity—including both U.S. and non-U.S. citizens—must provide a name and address, and have either a social security number (SSN) in the case of a person, or a Taxpayer Identification Number (TIN) or Employee Identification Number (EIN) in the case of a legal entity with multiple persons having ownership interests. In this latter situation, each person with an interest must have a TIN or EIN and must declare an interest share in the joint entity using the requisite USDA forms.

All participants in programs subject to payment eligibility and payment limitation requirements must submit to USDA two completed forms. The first, CCC-901 (Members' Information), identifies the participating persons and/or entities (through four levels of attribution if needed) and their interest share in the operation. The second form, CCC-902 (Farm Operating Plan), identifies the nature of each person's or entity's stake—that is, capital, land, equipment, active personal labor, or active personal management—in the operation. These forms need be submitted only once (not annually) but must be kept current in regard to any change in the farming operation. Critical changes to a farming operation might include adding a new family member, changing the land rental status from cash basis to share basis, purchasing additional base acres equivalent to at least 20% of the previous base, or substantially altering the interest share of capital or equipment contributed to the farm operation. This information is critical in determining the extent to which each person is actively engaged in the farming operation as described below.

AEF criteria are a required component of eligibility for payments under the principal revenue support programs of the 2018 farm bill, including the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs and benefits under the Marketing Assistance Loan (MAL) program. In addition, two direct payment programs established by the Secretary of Agriculture under the authority of the Commodity Credit Corporation Charter Act require that payment recipients meet all AEF criteria—the Cotton Ginning Cost-Share program and the Market Facilitation Program. Finally, benefits under the Trade Adjustment Assistance for Farmers also require that participants meet AEF requirements.

To be eligible for payments under any of these programs, participants—individuals as well as other types of legal entities—must meet specific requirements concerning their "active participation" in the farming operation. In contrast, AEF criteria are not applicable for other farm programs including crop insurance and conservation programs ( Table 4 ).

The AEF requirements apply equally to U.S. citizens, resident aliens, and foreign entities. This section briefly reviews the specific requirements for each type of legal entity to qualify as AEF.

To understand what it means to be AEF, consider first the case of a single producer. The 2014 farm bill (§1111) defined a producer as an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop and is entitled to a share of the crop that is produced on the farm. The 2018 farm bill retained this definition of a producer.

A person, as an individual producer, must meet the following three AEF criteria:

P1. The person, independently and separately from other individuals with an interest in the farm business, makes a significant contribution to the operation of:

b. active personal labor, active personal management, or a combination of personal labor and active personal management;

P2. The person's share of profits or losses is commensurate with his/her contribution to the farming operation; and

P3. The person shares in the risk of loss from the farming operation.

However, with respect to the latter two criteria (P2 and P3), USDA has generally interpreted them as having been met if a person or entity participating in a farm program receives income based on the farm's operating results and, thus shares in the profits and losses from the crop. The criteria for meeting ownership or rental control of farm assets (P1.a.) are straightforward. The active personal labor and/or management requirement (P1.b.) are described in more detail below.

"Active personal labor" means personally providing physical activities necessary in a farming operation, including activities involved in land preparation, planting, cultivating, harvesting, and marketing of agricultural commodities in the farming operation. Other physical activities include those required to establish and maintain conserving cover crops on Conservation Reserve Program acreages and those physical activities necessary in livestock operations. The personal labor contribution by an individual must be at least the smaller of 1,000 hours annually or 50% of the total hours needed to conduct a farming operation comparable in size to the individual's ownership interest in the operation.

The requirement for active personal management is less specific. For an individual it means personally providing and participating in management activities "critical to the profitability of the farming operation." Such management activities may be performed under one or more of the following categories:

Capital (which includes arranging financing and managing capital), acquiring equipment, acquiring land and negotiating leases, managing insurance, and managing participation in USDA programs; Labor (which includes hiring and managing of hired labor); and Agronomics and marketing (which includes selecting crops and making planting decisions), acquiring and purchasing crop inputs, managing crops and making harvest decisions, and pricing and marketing of crop production.

The GAO, in a 2013 report to Congress, pointed out that this broad definition of active personal management made it very difficult for USDA to determine whether individual contributions are significant. Furthermore, GAO suggested that, under this broad definition, management responsibilities could be distributed among farm operation members so as to increase the number of individuals who can claim eligibility for payments based on management contributions.

In terms of evaluating an individual's eligibility for program payments, the "active" personal labor requirement clearly implies that a person must be routinely "on site" to undertake physical activities in support of the farming operation. The "active" personal management requirement is less clear on physical location and potentially allows a person to make significant contributions of active personal management without physically visiting the farming operation.

Current law allows for special treatment of a spouse. If one spouse is determined to be actively engaged in farming, then the other spouse shall also be determined to have met the requirement. Thus, a married farmer and spouse qualify for a doubling of the individual payment limit.

Family membership in a farm business is defined by being a sibling, spouse, lineal ancestor (e.g., great-grandparent, grandparent, or parent), lineal descendant (e.g., son, daughter, grandchild, or great-grandchild), niece, nephew, or cousin of the principal operator. Every adult family member 18 years or older who receives income based on the farm's operating results is deemed to meet the AEF requirements.

An exception is also made for landowners who may forgo the AEF labor and management requirement and still be deemed in compliance with all AEF requirements if the landowner receives income based on the farm's operating results and, thus, shares in the risk of profits (P2) and losses (P3) from the crop.

Failure to Meet AEF Criteria for a Person

Any person or legal entity that does not satisfy the AEF requirements will not be eligible for farm program benefits under relevant programs. For example, a landowner who rents farmland to another farming operation for a fixed rental rate (i.e., under a fixed cash-rental arrangement) would bear no risk nor be subject to any potential loss from the farming operation. In other words, the landowner would fail to meet AEF criteria P2 and P3 described earlier. In such cases, the landowner would not be eligible for the relevant farm program benefits. Similarly, a landlord who rents land to a farming operation for a share of the crop that is guaranteed in volume or value independent of the actual harvest results would also not bear any risk and, thus, not be eligible for farm program benefits.

In the case of a joint operation, the amount of farm payments that can be earned in a year depends on the number of qualifying members and their ownership share. Each partner or member must separately meet all of the AEF criteria required for a person. In particular, each partner or member with an ownership interest must contribute active personal labor and/or active personal management to the farming operation (but subject to certain exemptions, such as the spousal and landlord exceptions listed above). The contribution must be identifiable and documentable, separate and distinct from the contributions made by any other partner or member, and critical to the profitability of the farming operation.

Since a partnership's potential payment limit is equal to the number of qualifying members (plus qualifying exemptions) times the individual payment limit, the partnership's total limit could be expanded by the addition of each new qualifying member. Similarly, the partnership's total limit could be reduced by one individual payment limit for each member that fails to meet the AEF requirements and any other eligibility criteria.

There is an exception to the AEF criteria for certain partnerships. When a partnership owns all of the land it uses for farming (i.e., no land is rented), then its members are automatically deemed to be actively engaged in farming, provided that the partners receive income based on the farm's operating results and, thus, share in the risk of profits and losses from the crop.

In the case of a nonfamily member of a joint venture seeking to satisfy AEF criteria, his or her individual labor and management contributions must be recorded in a special log to verify that a "significant contribution" has been achieved. This is described later in this report in the section entitled " Recordkeeping Requirement of Personal Hours Worked ."

In the case of a corporation or similar entity with multiple owners (or shareholders), the entity is essentially treated as a single individual. It is considered as "actively engaged in farming" with respect to a farming operation if:

C1.The corporation makes a significant contribution of capital, equipment, or land (or a combination thereof);

C2.Each member with an ownership interest in the corporate entity makes a significant contribution of personal labor or active personal management—whether compensated or not—to the operation that are:

c. separate and distinct from such contributions of other members;

C3.The collective contribution of corporate members is significant and commensurate with contributions to the farming operation; and

C4.The corporation also meets the AEF criteria cited above for a person of (P2) sharing commensurate profits or losses, and (P3) bearing commensurate risk.

If any member of the corporation fails to meet the labor and management requirements of C2 above, then any program payment or benefit to the corporation will be reduced by an amount commensurate with the ownership share held by that member. An exception to this requirement applies if (a) at least 50% of the entity's stock is held by members that are "actively engaged in providing labor or management," and (b) the total annual farm program payments received collectively by the stockholders or members of the entity is less than one payment limitation.

There is an additional exception to the AEF criteria for certain corporate entities. When a corporation owns all of the land it uses for farming (i.e., no land is rented), then the corporation is automatically deemed to meet the AEF criteria provided the corporation receives income based on the farm's operating results and, thus, shares in the risk of profits and losses from the crop.

When considering institutional recipients of farm payments subject to AEF criteria (i.e., ignoring family and individual payment recipients and recipients of farm payments not subject to AEF criteria), USDA data for 2015 suggests that there were 95,417 qualifying institutional arrangements ( Table 2 ).

New AEF Rule: Nonfamily Member Compliance

A nonfamily member of a farming operation is, by default, anyone who fails to meet the criteria of family membership. The 2014 farm bill (§1604) required USDA to add more specificity to the role that a nonfamily producer who is a member of a legal entity—primarily a partnership or joint venture—must play to qualify for farm program benefits. In the rule, USDA was directed to explicitly

1. Define what constitutes a " significant contribution of active personal management " for the purpose of payment eligibility. 2. Consider limits on the number of persons per farming operation who may be considered actively engaged in farming based on a significant contribution of active personal management . Such consideration should take into account: the size, nature, and management requirements of a farming operation; the changing nature of active personal management due to advancements of farming operations; and the degree to which these new regulations will adversely impact the long-term viability of the farming operation. 3. Exclude operations comprised solely of family members from these provisions. 4. Include a plan for monitoring the status of compliance reviews.

The resulting USDA rule, published on December 16, 2015, specifies how legal entities comprised, either entirely or in part, of nonfamily members may be determined eligible for payments, based on a contribution of active personal management. The provisions of this rule do not apply to persons or entities comprised entirely of family members. It is noteworthy that, based on 2012 evidence in Table 1 , nonfamily farm operations comprise a relatively small share (less than 9%) of total farm operations. USDA estimated that the rule's limit on the number of farm managers could affect around 1,400 general partnerships and joint ventures, reducing USDA outlays (and benefits to producers) by about $50 million total for crop years 2016 through 2018, with an annual impact of $4 million to $38 million.

As a result of the rule, several additional requirements now apply to nonfamily farming operations seeking to qualify more than one farm manager. Specifically, in addition to the existing AEF requirements, a limit is placed on the number of nonfamily members of a farming operation that can be qualified as a farm manager. Also, an additional recordkeeping requirement now applies for each member of such farming operations contributing any active personal management.

Limit on Number of Nonfamily Farm Managers

This rule restricts the number of nonfamily farm managers per farming operation to o ne f arm m anager , with the following exceptions:

Two f arm m anagers permissible . If one person of the farming operation meets the AEF requirements by making a contribution of active personal management, and that farming operation seeks to qualify a second farm manager, the farming operation must also meet the requirement that it is either a large operation or a complex operation. T hree f arm m anagers permissible . To qualify a total of three farm managers, the operation is required to meet the requirements for both size and complexity. No m ore t han t hree f arm m anagers . Under no circumstances is a nonfamily farming operation allowed to qualify more than three persons as farm managers.

Recordkeeping Requirement of Personal Hours Worked

If a farming operation (comprised, in part, of nonfamily members) seeks to qualify one or more nonfamily farm managers as actively engaged in farming, then all persons that provide any management to the farming operation are required to maintain contemporaneous records or activity logs of their management activities, including the management activities that may not qualify as active personal management under this rule. Specifically, activity logs must include information about the location of where the management activity was performed (either on-site or remote) and the time expended or duration of the management and/or labor (see below) performed for the farming operation. In addition, a person's contributions must be identifiable and documentable, separate and distinct from the contributions of other members of the farm operation, and critical to the profitability of the farming operation.

Active Personal Management: Significant Contribution Redefined

The new definition for a significant contribution of active personal management (for nonfamily members only) requires an annual contribution of 500 hours of management or at least 25% of the total management required for that operation. Eligible management activities must be performed under one or more of the management categories listed earlier in the report section entitled " Active Personal Management ."

The final rule also takes into consideration all of the actions of the farming operation associated with the financing. Passive management activities such as attendance at board meetings or on conference calls, or watching commodity markets or input markets (without making trades), are not considered as making a significant contribution of active personal management.

Significant Combinations of Labor and Management

The final rule, in response to public comment on the difficulty in discriminating between management and labor for farming operations, expanded the measurable standard of what constitutes a significant contribution to include a potential combination of both active personal labor and active personal management. A minimum hourly requirement for a significant contribution of active personal labor of 1,000 hours was established and joined with the hourly standard of 500 hours adopted for defining a significant contribution of active personal management. USDA published a table showing the qualifying minimum combinations of hours contributed to management and labor activities. The table includes five minimum thresholds of combined hours, ranging from 550 hours with predominantly management-identified hours to 950 hours with predominantly labor-identified hours.

Since 1987, when Congress first introduced the term "actively engaged in farming" and required that an individual or entity meet AEF criteria to receive farm program payments, U.S. legislators have continued their efforts to limit payments to those who are actual farmers. However, long-standing concerns remain that some farm operations are organized to overcome program payment limits and maximize the amount of their farm program payments. In particular, some advocacy groups suggest that USDA's new rule did not go far enough in tightening AEF criteria and that it continues to allow for a high number of farm managers and associated payment limits for both family and nonfamily farm operations. These concerns include the lack of specificity in eligibility criteria that continues to allow for as many as three nonfamily farm managers (each, plus their spouses, qualifying for a full payment limit) and no limit on the number of potential farm managers from family-held farm operations. This is noteworthy because family-operated farm businesses represent over 91% of all farm operations.

As an example of the lack of specificity, critics point out that the 2014 farm bill provision (§1604) permits exceptions under the rationale of "concern for the long-term viability" of the farming operation. Furthermore, critics contend that, under the current monitoring system, it can be difficult for USDA to verify the management claims of farm operation partners. Several of these concerns are briefly described here.

GAO Studies: Program Eligibility, Monitoring, and Enforcement

GAO has undertaken several studies of program eligibility and of USDA efforts to monitor and enforce program payment limits. GAO has cited three principal hindrances to USDA oversight and enforcement of AEF regulations for members—both family and nonfamily alike—of a farming operation that claim AEF compliance by providing active personal management: (1) the definition of active personal management is broad and can be interpreted to include many potential activities, (2) requirements of what constitutes significant contributions of management are subjective, and (3) it is difficult to verify individuals' evidence of claimed contributions of active personal management and personal labor—often depending on interviews with individual payment recipients.

GAO has said that the three concerns cited above prevent USDA from rigorously enforcing payment eligibility criteria. As a result, large farm operations can distribute various management activities among a partnership's members so as to increase the number of individuals who can claim eligibility for payments based on different types of management contributions. Furthermore, broad regulations allow members to claim that they are making a significant management contribution without physically visiting the farming operation. Thus, the federal government risks distributing payments to individuals who may have little actual involvement in farming operations.

In a 2010 regulation, USDA recognized that it has the regulatory authority to tighten eligibility criteria but that it is unlikely to use that authority unless explicitly directed to do so by Congress:

The definition of what constitutes a significant contribution is provided by regulation, not by statute and could be changed. We recognize the difficulty in determining the significance of a management contribution under the current definition and the desirability of a measurable, quantifiable standard. However, unlike labor, the significance of a management contribution is not appropriately measured by the amount of time a person spends doing the claimed contribution. The current regulatory definition of a significant contribution of active personal management has been in effect for over 20 years; Congress has not mandated a more restrictive definition during that time, including in the 2008 Farm Bill.

As a result, GAO stated that "it appears unlikely that FSA will change its regulatory definition of active personal management in view of its 2010 statements in the Federal Register ."

USDA data from 2015 ( Table 3 ) demonstrated that partnerships and joint ventures with larger numbers of members relied more heavily on active personal management criteria to meet AEF qualifications.

Congress—in the 2014 farm bill (§1604)—explicitly directed USDA to design new regulations for AEF criteria but only for nonfamily members of farming operations. Furthermore, Congress directed that the new AEF criteria avoid any new regulatory obligations that would add to any paperwork or management burden of family farm operations. USDA released the rule in 2015.

Limit on Number of Allowable Farm Managers

Under the 2014 farm bill and 2015 USDA rule, a farm operation—operated primarily by nonfamily members—that meets both the size and complexity criteria discussed above could qualify three farm managers (and potentially their spouses) in addition to those persons qualifying under the personal labor criteria. Thus, a large nonfamily farming operation could have a payment limit that is over $1 million per year. Family-managed farm operations have no limit on the number of potential qualifying members and, thus, on the overall payment limit.

Members of Congress may be interested in reviewing the number of farm managers allowed, possibly by establishing an explicit limit on the number a farming operation could claim. For example, everyone on a farm operation who qualifies as a working farmer (i.e., provides land, capital, or equipment and meets the personal labor requirement) could remain eligible to participate in farm programs and receive program payments. However, a restriction could be developed whereby only a single farm manager would be eligible to qualify without providing any farm labor. The spouses of the qualifying persons—both workers and manager—could continue to qualify for payments.

The 2014 farm bill (§1604(b)(3)) instructed USDA to consider the extent to which new regulations would "adversely impact" the long-term viability of the farming operation. The basis for determining whether a "significant contribution" of managerial activity has occurred is a subjective assessment. Some wonder whether it might negate any farm manager limit—even on nonfamily farm operations—since one could argue that all farm managers are critical for a farm's long-term viability.

The farm manager restrictions related to the 2015 USDA regulation are relevant only for nonfamily members of a farming operation. The 2014 farm bill (§1604(c)) explicitly directs USDA to not apply any new restrictions to farm operations comprised solely of family members. An adult family member is considered actively engaged in farming if he or she receives income based on the farm's operating results. It is assumed that such a family member meets any input or labor requirements, and no recordkeeping is required to verify that sufficient labor hours have been worked on the farm operation or that sufficient managerial time has been made.

Various Members of Congress will likely be interested in monitoring the success of USDA's efforts to impose new payment disciplines on nonfamily participants while preventing new management burdens on family farms. Furthermore, they will likely be interested in the extent, if any, to which large farm operations are able to avoid eligibility and payment requirements.


Yemen: Civil War and Regional Intervention

Summary: This report provides information on the ongoing crisis in Yemen. Now in its fifth year, the war in Yemen shows no signs of abating. The war has killed thousands of Yemenis, including combatants as well as civilians, and has significantly damaged the country's infrastructure. The difficulty of accessing certain areas of Yemen has made it problematic for governments and aid agencies to count the war's casualties. One U.S. and European-funded organization, the Armed Conflict Location & Event Data Project (ACLED), estimates that 60,000 Yemenis have been killed since January 2016.

Summary: Though fighting continues along several fronts, on December 13, 2018, Special Envoy of the United Nations Secretary-General for Yemen Martin Griffiths brokered a cease-fire centered on the besieged Red Sea port city of Hudaydah, Yemen's largest port. As part of the deal, the coalition and the Houthis agreed to redeploy their forces outside Hudaydah city and port. The United Nations agreed to chair a Redeployment Coordination Committee (RCC) to monitor the cease-fire and redeployment. On January 16, the United Nations Security Council (UNSCR) passed UNSCR 2452, which authorized (for a six-month period) the creation of the United Nations Mission to support the Hudaydah Agreement (UNMHA), of which the RCC is a significant component. As of late March 2019, the Stockholm Agreement remains unfulfilled, although U.N. officials claim that the parties have made "significant progress towards an agreement to implement phase one of the redeployments of the Hudayda agreement."

Summary: Although both the Obama and Trump Administrations have called for a political solution to the conflict, the two sides in Yemen appear to fundamentally disagree over the framework for a potential political solution. The Saudi-led coalition demands that the Houthi militia disarm, relinquish its heavy weaponry (ballistic missiles and rockets), and return control of the capital, Sanaa, to the internationally recognized government of President Abdu Rabbu Mansour Hadi, who is in exile in Saudi Arabia. The coalition asserts that there remains international consensus for these demands, insisting that the conditions laid out in United Nations Security Council Resolution (UNSCR) 2216 (April 2015) should form the basis for a solution to the conflict. The Houthis reject UNSCR 2216 and seem determined to outlast their opponents while consolidating their control over northern Yemen. Since the December 2017 Houthi killing of former President Ali Abdullah Saleh, a former Houthi ally, there is no apparent single Yemeni rival to challenge Houthi rule in northern Yemen. Armed groups, including Islamist extremists, operate in other parts of the country, and rival political movements and trends advance competing visions for the long-term reestablishment of national governance in the country. The reconciliation of Yemeni factions and the redefinition of the country's political system, security sector, and social contract will likely require years of additional diplomatic engagement.

Summary: According to the United Nations, Yemen's humanitarian crisis is the worst in the world, with close to 80% of Yemen's population of nearly 30 million needing some form of assistance. Two-thirds of the population is considered food insecure; one-third is suffering from extreme levels of hunger; and the United Nations estimates that 230 out of Yemen's 333 districts are at risk of famine. In sum, the United Nations notes that humanitarian assistance is "increasingly becoming the only lifeline for millions of Yemenis."

Summary: For additional information on Yemen, including a summary of relevant legislation, please see CRS Report R45046, Congress and the War in Yemen: Oversight and Legislation 2015-2019, by Jeremy M. Sharp and Christopher M. Blanchard.

Central governance in Yemen, embodied by the decades-long rule of former President Ali Abdullah Saleh, began to unravel in 2011, when political unrest broke out throughout the Arab world. Popular youth protests in Yemen were gradually supplanted by political elites jockeying to replace then-President Saleh. Ultimately, infighting among various centers of Yemeni political power broke out in the capital, and government authority throughout the country eroded. Soon, militias associated with Al Qaeda in the Arabian Peninsula (AQAP) seized territory in one southern province. Concerned that the political unrest and resulting security vacuum were strengthening terrorist elements, the United States, Saudi Arabia, and other members of the international community attempted to broker a political compromise. A transition plan was brokered, and in 2012 former Vice President Abdu Rabbu Mansour Hadi became president.

With the support of the United States, Saudi Arabia, and the United Nations Security Council, President Hadi attempted to reform Yemen's political system. Throughout 2013, key players convened a National Dialogue Conference aimed at reaching broad national consensus on a new political order. However, in January 2014 it ended without agreement.

One antigovernment group in particular, the northern Yemeni Houthi movement, sought to use military force to reshape the political order. Within weeks of the National Dialogue Conference concluding, it launched a military offensive against various tribal allies of President Hadi. The Houthi were joined by the forces still loyal to former President Saleh, creating an alliance of convenience that was a formidable opponent to President Hadi and his allies.

In 2014, Houthi militants took over the capital of Sanaa (also spelled Sana'a) and violated several power-sharing arrangements. In 2015, Houthi forces advanced southward from the capital all the way to Aden on the Arabian Sea. In March 2015, after President Hadi, who had fled to Saudi Arabia, appealed for international intervention, Saudi Arabia and a hastily assembled international coalition launched a military offensive aimed at restoring Hadi's rule and evicting Houthi fighters from the capital and other major cities.

In April 2015, the United Nations Security Council passed Resolution (UNSCR) 2216 demanding that Houthi-Saleh forces end their use of violence and that all Yemeni parties avoid "further unilateral actions that could undermine the political transition in Yemen." The United States agreed to provide limited assistance to the coalition military operations, assistance which has evolved over time in response to conditions in the conflict and in light of congressional scrutiny.

In early December 2017, the Houthi-Saleh alliance unraveled, culminating in the killing of former President Saleh on December 4, 2017. Since Saleh's death, the coalition has made military gains, advancing northward along the Red Sea coast toward the port of Hudaydah (also spelled Hodeidah, Hudayda). Nevertheless, Houthi forces remain ensconced in northern Yemen and remain in control of the capital.

The war has exacerbated a humanitarian crisis in Yemen that began in 2011; as of January 2019, over half of the population required emergency food assistance. Access restrictions to certain areas of Yemen make it problematic for governments and aid agencies to count the war's casualties. One U.S. and European-funded organization, the Armed Conflict Location & Event Data Project (ACLED), estimates that 60,000 Yemenis have been killed since January 2016. UNHCR estimates that 3.9 million Yemenis were displaced internally as of January 2019.

In January 2019, the United Nations Panel of Experts on Yemen released their annual report covering 2018. This report noted that Yemen continues to "slide towards humanitarian and economic catastrophe." Though the actual ground war remains confined to "relatively small areas," the effect of the conflict on the economy, as well as the growing presence of armed groups and deep-rooted corruption, has impacted ordinary Yemenis within both Houthi-held areas and liberated areas.

Stockholm Agreement and Hudaydah Cease-Fire

On December 6, 2018, the warring parties to the conflict in Yemen convened in Sweden under the auspices of the United Nations to discuss various de-escalation proposals and a possible road map to a comprehensive peace settlement. The talks were the first formal negotiations since 2016. After a week of negotiations, all sides agreed to the Stockholm Agreement, which consists of three components: a cease-fire around the port city of Hudaydah, a prisoner swap, and a statement of understanding that all sides would form a committee to discuss the war-torn city Taiz.

On January 16, the United Nations Security Council (UNSCR) passed UNSCR 2452, which authorized (for a 6-month period) the creation of the United Nations Mission to support the Hudaydah Agreement (UNMHA), of which the RCC was a significant component.

For nearly two months, implementation of the Stockholm Agreement stalled. According to U.N. Special Envoy Griffiths, "The initial timelines were rather ambitious….We are dealing with a complex situation on the ground." The Stockholm Agreement did not specify which local actors were to assume responsibility for security in Hudaydah after both parties redeployed.

On February 17, the United Nations announced that "The parties reached an agreement on Phase 1 of the mutual redeployment of forces" whereby the Houthis would withdraw from Hudaydah port and the Saudi-led coalition would move out of the eastern outskirts of Hudaydah city. Still, the warring parties have yet to agree on the identities of local police forces to take over security in Hudaydah. As of March 2019, the parties had made "significant progress towards an agreement to implement phase one of the redeployments of the Hudayda agreement."

Until a final redeployment is reached, the Houthis remain ensconced in Hudaydah, with barricades, trenches and roadblocks still present throughout the city. The Houthis want local coast guard units to assume control. The coalition claims, however, that the leaders of the local coast guards are loyal to the Houthis, and U.N. observers may have difficulty in verifying the neutrality of security personnel in Hudaydah. U.N. officials have reported to the Security Council that the Houthis fear that a withdrawal from Hudaydah will make their forces vulnerable to attack by the coalition.

Meanwhile, in Jordan, several meetings between the Houthis and the Hadi government have taken place over a planned prisoner exchange as called for in the Stockholm Agreement. Although some exchanges of wounded personnel and prisoners have taken place, the talks have not produced a comprehensive agreement to date.

Overall, many observers remain skeptical that the cease-fire reflects a broader impulse to end the war, seeing it instead as a means of easing international pressure on the coalition. Since the signing of the Stockholm Agreement, the Saudi-led coalition has conducted airstrikes in Sanaa in retaliation for a Houthi drone attack against a Yemeni military parade. In late January, artillery fire struck a camp for internally displaced people in Yemen's northwestern Hajjah province, killing eight civilians and wounding 30 others. According to reporting by the United Nations, implementation of the Stockholm Agreement has been hindered by an overall lack of trust and a reluctance to make operational concessions outside of a comprehensive political agreement.

In 2019, the Trump Administration has continued to support United Nations-led efforts in addressing the humanitarian situation and working toward a comprehensive peace in Yemen. At the same time, the United States has continued to cooperate with Saudi Arabia and the UAE in countering terrorism and attempting to limit Iran's influence in Yemen. For the Trump Administration, U.S. officials have supported the continued defense of Saudi Arabia against Houthi missile and rocket strikes, while also openly calling on coalition members to use air power judiciously to minimize civilian casualties. After ending U.S. refueling support at the coalition's request in November 2018, the Administration has argued against congressional attempts to block arms sales or to end or condition U.S. assistance, arguing that continued U.S. assistance is more likely to achieve the objectives of limiting civilian casualties and maintaining strategic ties to Gulf partners than a punitive approach.

To address congressional concerns over errant coalition airstrikes against Yemeni civilians, on November 11, 2018, the United States halted in-flight refueling support for coalition aircraft at the request of the coalition. A month later, then-U.S. Ambassador-designate to Yemen Christopher Henzel noted in his Senate confirmation hearing that

"At our urging, the Saudi-led coalition has incorporated the no-strike list into its target development procedures, stopped the use of cluster munitions, changed its rules of engagement to incorporate U.S. recommendations, and established the Joint Incident Assessment team. The United States will continue to press the coalition and the Republic of Yemen government to minimize civilian casualties and expand urgent humanitarian efforts throughout the country."

In early February 2019, CENTCOM Commander General Joseph Votel testified before the Senate Armed Services Committee regarding the U.S. role in assisting Saudi Arabia. General Votel remarked that:

The United States will continue to support our regional partners developing processes and procedures to counter ballistic missiles (CBM) and counter unmanned armed aerial systems (C-UAS) to help mitigate threats to civilian populations and critical infrastructure…. We continue to share our own experiences and processes in an effort to improve Saudi Arabia's operational performance and reduce civilian casualties. CENTCOM's security cooperation with Saudi Arabia remains a critical link in our efforts to strengthen partners in the region and meet current and future challenges. The work of U.S. advisors is essential to the success of our mission, and Saudi Arabia underwrites the lion's share of their presence.

In February 2019, CNN reported that Saudi Arabia and the UAE had provided U.S. military equipment (armored vehicles) to local Yemeni units fighting the Houthis in possible violation of end-user foreign military sale or direct commercial sale agreements. The coalition has denied these charges, while the U.S. State Department has said that it is "seeking additional information" on the issue.

At the February 2019 Ministerial to Promote a Future of Peace and Security in the Middle East in Warsaw, Poland, members of the self-described "quad" (United States, United Kingdom, Saudi Arabia, and the United Arab Emirates) met to coordinate their policy toward the Yemen conflict. The quad emphasized the importance of implementing the Stockholm Agreement, the problematic role Iran plays in arming and financing the Houthis, and the need for additional humanitarian assistance. The foreign ministers comprising the quad also "expressed full support for Saudi Arabia and its legitimate national security concerns and called for an immediate end to such attacks by Houthi forces and their allies."

On February 13, 2019, the House passed (248-177) H.J.Res. 37 , a joint resolution "Directing the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress." Prior to its passage by the House, the White House issued a Statement of Administration Policy in which the Administration argued that "the premise of the joint resolution is flawed" because the United States has provided only "limited support to member countries of the Saudi-led coalition" and U.S. forces providing such intelligence and logistics support are not engaged in hostilities. As amended and passed by the House, Section 4 of H.J.Res. 37 includes a rule of construction stating that "Nothing in this joint resolution may be construed to influence or disrupt any intelligence, counterintelligence, or investigative activities conducted by, or in conjunction with, the United States Government…"

The Senate companion resolution, S.J.Res. 7 , was introduced on January 30, 2019 and passed by the Senate (54-46) on March 13, 2019. As amended, S.J.Res. 7 includes rules of construction stating that "nothing in this joint resolution may be construed to influence or disrupt any intelligence, counterintelligence or investigative activities relating to threats in or emanating from Yemen conducted by, or in conjunction with, the United States Government…" (Section 4) and that "nothing in this joint resolution may be construed as authorizing the use of military force" (Section 7).

On February 7, 2019, Ranking Member on the Senate Foreign Relations Committee Senator Robert Menendez introduced S. 398 , the Saudi Arabia Accountability and Yemen Act of 2019. This bill, which was originally introduced in the 115 th Congress, would, among other things, require the end of in-flight refueling for Saudi-led coalition operations in Yemen, suspend certain arms sales to the kingdom, sanction persons blocking humanitarian access in Yemen, and sanction persons supporting the Houthis in Yemen.

Although Houthi militia forces most likely do not depend on Iran for all of their armaments, financing, and manpower, many observers agree that Iran and its Lebanese ally Hezbollah have aided Houthi forces with advice, training, and arms shipments. In 2016, one unnamed Hezbollah commander interviewed about his group's support for the Houthis remarked "After we are done with Syria, we will start with Yemen, Hezbollah is already there.... Who do you think fires Tochka missiles into Saudi Arabia? It's not the Houthis in their sandals, it's us." In repeated public statements by high-level Saudi officials, Saudi Arabia has cited Iran's illicit support for the Houthis as proof that Iran is to blame for the Yemen conflict. Reports and allegations of Iranian involvement in Yemen have become more frequent as the war has continued, and from Iran's perspective, aiding the Houthis would seem to be a relatively low-cost way of keeping Saudi Arabia mired in the Yemen conflict. However, Iran had few institutionalized links to the Houthis before the civil conflict broke out in 2015, and questions remain about the degree to which Iran and its allies can control or influence Houthi behavior. At present, Iranian aid to the Houthis does not appear to match the scale of its commitments to proxies in other parts of the Middle East, such as in Syria, Lebanon, and Iraq.

Prior to the 2015 conflict, the central government in Yemen had acquired variants of Scud-B missiles from the Soviet Union and North Korea. The Houthis took control of these missiles as part of their seizure of the capital. Since 2016, the Houthis have been firing what they call the "Burkan" short-range ballistic missile (claimed range of 500-620 miles) into Saudi Arabia (the latest version is the Burkan-2H). In November 2017, after the Houthis fired a Burkan-2H deep into Saudi Arabian territory, the Saudi-led coalition and U.S. officials said that the Burkan-2H is an Iran-manufactured Qaim missile.

In January 2018, the United Nations Panel of Experts on Yemen concluded that Iran was in noncompliance with UNSCR 2216 for failing to prevent the transfer to Houthi forces of Iranian-made short-range ballistic missiles. On February 26, 2018, Russia vetoed a draft U.N. Security Council resolution that would have expressed U.N. concern that Iran is in noncompliance with the international arms embargo created by UNSCR 2216.

In summer 2018, the United Nations Panel of Experts on Yemen provided a confidential report to the United Nations Security Council suggesting that Iran may be continuing to violate the international arms embargo by supplying the Houthis with advanced weaponry. After the U.N. experts visited Saudi Arabia and inspected debris from missiles fired by the Houthis, their report noted that these weapons showed "characteristics similar to weapons systems known to be produced in the Islamic Republic of Iran" and that there was a "high probability" that the missiles were manufactured outside of Yemen, shipped in sections to the country, and reassembled by the Houthis.

In May 2018, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated five Iranian individuals who have "provided ballistic missile-related technical expertise to Yemen's Houthis, and who have transferred weapons not seen in Yemen prior to the current conflict, on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)."

In testimony to the Senate Select Committee on Intelligence in January 2019, Director of National Intelligence Daniel Coats stated:

In Yemen, Iran's support to the Huthis, including supplying ballistic missiles, risks escalating the conflict and poses a serious threat to US partners and interests in the region. Iran continues to provide support that enables Huthi attacks against shipping near the Bab el Mandeb Strait and land-based targets deep inside Saudi Arabia and the UAE, using ballistic missiles and UAVs.

The U.N. Panel of Experts on Yemen reported in January 2019 that the panel "has traced the supply to the Houthis of unmanned aerial vehicles and a mixing machine for rocket fuel and found that individuals and entities of Iranian origin have funded the purchase."

Saudi Arabia and U.S. Support for the Coalition

For Saudi Arabia, according to one prominent analyst, the Houthis embody what Iran seeks to achieve across the Arab world: that is, the cultivation of an armed nonstate, non-Sunni actor who can pressure Iran's adversaries both politically and militarily (akin to Hezbollah in Lebanon). A decade before the current conflict began in 2015, Saudi Arabia supported the central government of Yemen in various military campaigns against a Houthi insurgency which began in 2004.

In 2014, when Houthi militants took over the capital and violated several power-sharing arrangements, Saudi leaders expressed increasing alarm about Houthi advances. In March 2015, after President Hadi, who had fled to Saudi Arabia, appealed for international intervention, Saudi Arabia quickly assembled an international coalition and launched a military offensive aimed at restoring Hadi's rule and evicting Houthi fighters from the capital and other major cities. Saudi-led coalition forces began conducting air strikes against Houthi-Saleh forces and imposed strict limits on sea and air traffic to Yemen.

From the outset, Saudi leaders sought material and military support from the United States for the campaign. In March 2015, President Obama authorized "the provision of logistical and intelligence support to GCC-led military operations," and the Obama Administration announced that the United States would establish "a Joint Planning Cell with Saudi Arabia to coordinate U.S. military and intelligence support." U.S. CENTCOM personnel were deployed to provide related support, and U.S. mid-air refueling of coalition aircraft began in April 2015 and ended in November 2018.

In the years since, the Saudi military and its coalition partners have provided advice and military support to a range of pro-Hadi forces inside Yemen, while waging a persistent air campaign against the Houthis and their allies. Saudi ground forces and Special Forces have conducted limited cross-border operations, and Saudi naval forces limit the entry and exit of vessels from Yemen's ports. Separately, a United Nations Verification and Inspection Mechanism (UNVIM) has operated since May 2016 to assist in validating commercial sea and air traffic in support of the arms embargo imposed by Resolution 2216.

According to President Trump's December 2018 letter to Congress consistent with the War Powers Resolution, U.S. Armed Forces, "in a non-combat role,"

continued to provide military advice and limited information, logistics, and other support to regional forces combatting the Houthi insurgency in Yemen; however, aerial refueling of regional forces' aircraft ended in November 2018. United States forces are present in Saudi Arabia for this purpose. Such support does not involve United States Armed Forces in hostilities with the Houthis for the purposes of the War Powers Resolution.

U.S. Counterterrorism Operations in Yemen

As the Saudi-led coalition's campaign against the Houthis continues and Yemen fragments, the United States has sustained counterterrorism operations against Al Qaeda in the Arabian Peninsula (AQAP) and various affiliates of the Islamic State. In total, CENTCOM conducted 36 air strikes in Yemen in 2018. According to President Trump's December 2018 letter to Congress consistent with the War Powers Resolution, "a small number of United States military personnel are deployed to Yemen to conduct operations against al-Qa'ida in the Arabian Peninsula (AQAP) and ISIS‑Yemen." In December 2018, General Frank McKenzie testified before the Senate Armed Services Committee stating that "they [AQAP] have an aspiration to attack the United States. They are prevented from generating that only because of the direct pressure that remains on them. So that is a clear, unequivocal national interest of the United States."

Some observers contend that AQAP's power inside Yemen has diminished considerably as a result of losses sustained from U.S. counterterrorism operations and of competing Yemeni factions vying for supremacy. According to Gregory D. Johnsen, resident scholar at the Arabia Foundation, "AQAP is weaker now than it has been at any point since it was formed in 2009."

In August 2018, U.S. officials claimed that one of the most high-value targets in the AQAP organization, bomb maker Ibrahim al Asiri, had been killed in a U.S. air strike last year. Asiri was a Saudi national who was believed to have created the explosive devices used in the 2009 Christmas Day attempted bombing of Northwest Airlines Flight 253, in a 2009 attack against former Saudi Arabian intelligence chief Mohammed bin Nayef, and in the October 2010 air cargo packages destined for Jewish sites in Chicago.

In January 2019, U.S. officials confirmed that Jamal al-Badawi, an al Qaeda operative involved in the October 2000 bombing of the USS Cole in Aden, was killed in a precision strike in Marib governorate on January 1. Al-Badawi had been indicted by a federal grand jury in 2003 for the murder of U.S. nationals and U.S. military personnel.

To date, two American soldiers have died in the ongoing U.S. counterterrorism campaign against AQAP and other terrorists inside Yemen. In January 2017, Ryan Owens, a Navy SEAL, died during a counterterrorism raid in which between 4 and 12 Yemeni civilians also were killed, including several children, one of whom was a U.S. citizen. The raid was the Trump Administration's first acknowledged counterterror operation. In August 2017, Emil Rivera-Lopez, a member of the elite 160th Special Operation Aviation Regiment, died when his Black Hawk helicopter crashed off the coast of Yemen during a training exercise.

According to the United Nations, Yemen's humanitarian crisis is the worst in the world, with close to 80% of Yemen's population of nearly 30 million needing some form of assistance. The U.N.Office for the Coordination of Humanitarian Affairs (OCHA) estimates that two-thirds of the population is food insecure, one-third are suffering from extreme levels of hunger, and 230 out of Yemen's 333 districts were at risk of famine as of January 2019. In sum, the United Nations notes that humanitarian assistance is "increasingly becoming the only lifeline for millions of Yemenis."

As noted above, on February 17, the parties to the conflict began to implement the Stockholm Agreement. The deal calls for main roads to reopen from Hudaydah to Sanaa and Taiz and humanitarian access to the Red Sea Mills grain storage facility, which holds enough grain to provide food for 3.7 million Yemenis for a month. Access to the Mills has been cut off since September 2018.

On February 26 in Geneva, the United Nations and the Governments of Sweden and Switzerland hosted the third annual pledging conference for the crisis in Yemen. Saudi Arabia and the UAE each pledged $750 million. For 2019, the United Nations is seeking $4 billion from donors for programs in Yemen. The 2018 humanitarian appeal sought a little over $3 billion, of which donors have provided $2.58 billion to date. The United States, Saudi Arabia, the United Arab Emirates, and Kuwait combined accounted for 66.8% of all contributions to the 2018 appeal.

Between FY2018 and FY2019, the United States has provided $720.8 million in emergency humanitarian aid for Yemen. Most of these funds ($498 million) are provided through USAID's Office of Food for Peace to support the World Food Programme in Yemen. Since March 2015, the United States has been the largest contributor of humanitarian aid to Yemen, with more than $1.71 billion in U.S. funding provided since FY2015. The United States provided a total of $566.2 million in humanitarian assistance in FY2018. Funds were provided to international aid organizations from USAID's Office of Foreign Disaster Assistance (OFDA), USAID's Food for Peace (FFP), and the U.S. Department of State's Bureau of Population, Refugees, and Migration (State/PRM).

Humanitarian conditions continue to be undermined both by economic disruptions caused by the fracturing of the country's financial system and by access constraints imposed by parties to the conflict.

Food Insecurity and the Depreciation of Yemen's Currency

Remote regions of northern Yemen deep in Houthi territory are often the most challenging areas in which to deliver food aid. In most other parts of the country, food is available for purchase in the marketplace but prices are unaffordable for wide swaths of the population. According to the Food and Agriculture Organization of the United Nations, "The average cost of the minimum survival food basket—comprised of the minimum items required for a household to survive for one month—remains more than 110 percent higher than prior to the conflict's escalation in March 2015."

One cause of inflationary prices is the depreciation of the national currency (rial). Yemen has two competing central banks, one in Sanaa (run by the Houthis) and one in Aden (run by the Hadi government). The Houthis in Sanaa have depleted the original central bank's foreign currency reserves and have been unable to pay public sector salaries. The central bank in Aden has liberally printed money, which has driven down the value of the rial. According to the Economist Intelligence Unit's outlook for 2019, "rapid currency depreciation for most of 2018 significantly increased the price of imports [most Yemeni food is imported], and, despite a rally in the rial in late 2018, is a trend that is likely to continue throughout the forecast period as the Aden-based authorities continue to print money..." In 2018, Saudi Arabia agreed to lend $2 billion with the central bank in Aden to help the Hadi government finance food imports. However, according to one report, as of November 2018, "only a little over $170 million had been authorized for payment."

Restrictions on the Flow of Commercial Goods and Humanitarian Aid

One of the key aspects of the 2015 United Nations Security Council Resolution (UNSCR) 2216 is that it authorizes member states to prevent the transfer or sale of arms to the Houthis and also allows Yemen's neighbors to inspect cargo suspected of carrying arms to Houthi fighters. In March 2015, the Saudi-led coalition imposed a naval and aerial blockade on Yemen, and ships seeking entry to Yemeni ports required coalition inspection, leading to delays in the off-loading of goods and increased insurance and related shipping costs. Since Yemen relies on foreign imports for as much as 90% of its food supply, disruptions to the importation of food exacerbate already strained humanitarian conditions resulting from war.

To expedite the importation of goods while adhering to the arms embargo, the European Union, Netherlands, New Zealand, the United Kingdom, and the United States formed the U.N. Verification and Inspection Mechanism (UNVIM), a U.N.-led operation designed to inspect incoming sea cargo to Yemen for illicit weapons. UNVIM, which began operating in February 2016, can inspect cargo while also ensuring that humanitarian aid is delivered in a timely manner.

However, Saudi officials argue that coalition-imposed restrictions and strict inspections of goods and vessels bound for Yemen are still required because of Iranian weapons smuggling to Houthi forces. Saudi officials similarly argue that the delivery of goods to ports and territory under Houthi control creates opportunities for Houthi forces to redirect or otherwise exploit shipments for their material or financial benefit.

According to the latest reporting from United Nations Office for the Coordination of Humanitarian Affairs (U.N.OCHA), over the last several months, the volume of cargo discharged at Hudaydah and Saleef ports dropped, and now is 20% less than when the conflict began in 2015.

Yemen is experiencing the world's largest ongoing cholera outbreak. Since late 2016, there have been more than 1.3 million suspected cholera cases and nearly 2,800 associated deaths. Cholera is a diarrheal infection that is contracted by ingesting food or water contaminated with the bacterium Vibrio cholerae . Yemen's water and sanitation infrastructure have been devastated by the war. Basic municipal services such as garbage collection have deteriorated and, as a result, waste has gone uncollected in many areas, polluting water supplies and contributing to the cholera outbreak. In addition, international human rights organizations have accused the Saudi-led coalition of conducting air strikes that have unlawfully targeted civilian infrastructure, such as water wells, bottling facilities, health facilities, and water treatment plants.

Humanitarian organizations working in the WASH sector have improved cholera prevention and reduced the frequency of new cases, but have not eliminated the crisis. According to U.N.OCHA's 2019 Yemen Humanitarian Needs Overview, "Public water and sanitation systems require increased support to provide minimum services and avoid collapse. Some 22 per cent of rural and 46 per cent of urban populations are connected to partially functioning public water networks, and lack of electricity or public revenue creates significant reliance on humanitarian support." As of January 2019, 17.8 million people in Yemen are living without access to safe water and sanitation, and 19.7 million lack access to adequate health care.

While the Stockholm Agreement has the potential to lead to a broader, nation-wide cease-fire, the longer it takes to implement, the greater risk of the agreement's collapse and the prospect for renewed conflict in Hudaydah. Although fighting has continued along several fronts since December 2018, the Stockholm Agreement has provided the Saudi-led coalition with the possibility of gradually extricating itself its intervention in Yemen. If the cease-fire collapses, then the coalition would have to weigh the benefits of trying to evict the Houthis from Hudaydah militarily with the humanitarian costs to the Yemeni people and the reputational damage it would incur within the international community.

Even if the United Nations is able to make progress toward a comprehensive peace agreement, Yemen is still beset by multiple political conflicts and violence. In the south, regional secessionists are at odds with what remains of President Hadi's internationally recognized government. In the partially Houthi-besieged city of Taiz, Yemen's third-largest city, rival militias backed by the coalition have engaged in internecine warfare and have been accused by human rights groups of committing war crimes.

Many key questions about the future of Yemen remain unanswered. In the context of the current Houthi-Saudi-led coalition conflict, few observers have insight into whether or under what conditions the Houthis might be willing to relinquish their heavy or advanced weaponry used to threaten Saudi Arabia, the United Arab Emirates, and maritime shipping. Iran, now involved in Yemen in new ways, may prove unwilling to sever ties that vex its Saudi adversaries. Political and military compromise between the coalition and the Houthis could bring fighting to an end, but might also entrench an anti-U.S. and anti-Saudi Houthi movement as a leading force in a new order in Yemen.

The complexity of Yemen's internal politics and the short-term need to resolve the current conflict have overshadowed domestic and international consideration of what the future of Yemeni governance may be. Overall, the prospects for returning to a unified Yemen appear dim. According to the United Nations Panel of Experts on Yemen, "The authority of the legitimate Government of Yemen has now eroded to the point that it is doubtful whether it will ever be able to reunite Yemen as a single country." While the country's unity is a relatively recent historical phenomenon (dating to 1990), the international community had widely supported the reform of Yemen's political system under a unified government just a few years ago. In 2013, Yemenis from across the political spectrum convened a National Dialogue Conference aimed at reaching broad national consensus on a new political order. However, in January 2014 it ended without agreement, and the Houthis launched a war.

The failure of the 2013 National Dialogue Conference aimed at reaching broad national consensus on a new political order continues to violently reverberate throughout Yemen. If some semblance of normalcy is to return to the country, local players will have to return to addressing key issues, such as the power of a central government, the devolution of power to regional authorities, and the composition of national security forces. The longer these issues remain unresolved, the greater the prospect for Yemen's dissolution into competing self-declared autonomous regions.