Small Scale Farming

[Dace]

I have a question.

I one was to purchase a farm/ranch as a business...would that be a better way to go than a personal residence purchase?

IF by some freak alignment of the stars, my DH was willing to CONSIDER moving out of the area so that we could start up a small biz of raising some animals...would you get a better deal/loan going at it from a business angle?

In my area there is no organic free range meats to be found...other than what is mass produced and in the grocery chains. I just wonder if there is not a niche market out there for people looking to buy wholesome meat from a small family farm.

Keeping in mind that this is all fantasy and I know nothing about raising up animals!

 

[Wifezilla]

I wouldn't get a loan at this point. Too much weirdness in the financial markets.

Start stashing cash. Maybe you can buy something outright some day.

 

[keljonma]

I would suggest that before you find a particular piece of land, determine the areas you would possible like to live. Then find out what amount of land used for agricultural purposes in the area enables you for tax free status or tax breaks. Here in our area, you must have at least 5 acres for CAUV tax breaks.

This is an example of the Ohio CAUV fact sheet and other information....... you should be able to find something similar for your state.

http://ohioline.osu.edu/cd-fact/1267.html
http://www.timbertax.org/statetaxes/states/proptax/ohio.asp


See if you can find Country Life: A Handbook For Realists And Dreamers by Paul Heiney at your library system. It breaks down land usage from a city lot to large muti-acre farms. It isn't really a "how to" book, but does show a lot of possibilities, no matter your land holdings.

 

[FarmerChick]

I have a question.

I one was to purchase a farm/ranch as a business...would that be a better way to go than a personal residence purchase?

IF by some freak alignment of the stars, my DH was willing to CONSIDER moving out of the area so that we could start up a small biz of raising some animals...would you get a better deal/loan going at it from a business angle?

In my area there is no organic free range meats to be found...other than what is mass produced and in the grocery chains. I just wonder if there is not a niche market out there for people looking to buy wholesome meat from a small family farm.

Keeping in mind that this is all fantasy and I know nothing about raising up animals!

A biz is a biz and needs to be treated as such. So while you can write off feed purchase etc. you must include all sales as income...etc. etc. etc.
And the tax break for agri. vs. residential is NOT big....believe me. I have 120 acres and don't pay THAT much less at all being agri.

SO---you could protect yourself. Use a residential home and be an LLC.
LLC (limited liability corp.) means that if your produce or animals cause harm, they can not sure you personally. Just what the LLC owns. It could only own the animals, farm equip, etc. but not the house and land.
So very safe way to proceed

look at your options...and be wise! don't nilly-willy into it...learn about the best route to handle your biz.

 

[inchworm]

You really have to look into the county and state laws. Where I live, property taxes on agricultural land is a tiny fraction for that of regular property. They do have regulations as what counts as agriculture, though.

 

[Beekissed]

I have a question.

I one was to purchase a farm/ranch as a business...would that be a better way to go than a personal residence purchase?

IF by some freak alignment of the stars, my DH was willing to CONSIDER moving out of the area so that we could start up a small biz of raising some animals...would you get a better deal/loan going at it from a business angle?

In my area there is no organic free range meats to be found...other than what is mass produced and in the grocery chains. I just wonder if there is not a niche market out there for people looking to buy wholesome meat from a small family farm.

Keeping in mind that this is all fantasy and I know nothing about raising up animals!

I would also suggest reading Joel Salatin's You Can Farm. It really gives a low down on small scale farming of the type you describe. It can give you an idea of the work involved, as well as government involvement in your sale of meat.

 

[sylvie]

To add to Keljonma's CAUV- the other really nice aspect to having the equivalent to a CAUV is that the building dept can't touch you, make you get permits for anything in that respect.
Farmers around here add agricultural buildings without needing permits or inspections. They put on decks to the house, drill for water, add ponds, reroof, you name it. There are some considerations like placing a fence back a certain distance from the road. This is one reason, other than cheaper property taxes, that we've been looking at CAUVs.

The drawback to a CAUV is that the property tax that they aren't charging you will be retroactively assessed to the new owners when you go to sell, which is a very bad selling point. And that you have to show a certain amount of profit from agri products from the property for 3 years before you are eligible. This is my understanding.

ETA not wearing glasses= errors

 

[Dace]

As usual...great feedback. I love that I can always come to you all with questions and get such a wealth of diverse information

I am really just thinking out loud here with my original question. We saw Food inc last night and it really makes you think there just has to be a better way. Even if only for our own personal consumption.

Bee....when Joel was on the screen all I could think about was you

 

[patandchickens]

Are you talking about buying a farm and starting a business, or are you talking about buying an existing outfit that is doing something fairly close to what you're proposing although maybe not exactly?

The latter sounds reasonably sensible, but of course is going to be expensive and to get a loan you'd have to convince the bank that you have both the business experience/acumen AND the livestock experience/acumen to make it work.

The former -- buying a place with some land and trying to set up an organic free range meat operation from scratch -- sounds to me like a very dangerous thing to do in today's economy. This is not a great time to be relying on peoples' willingness to start spending extra money on "premium" type products. At the very least you'd want to do some very thorough very careful very ACCURATE market research first, remembering that what people SAY they'd buy is often different than what they actually DO buy if you put it into production.

I mean, if you were going to buy some land anyhow, and were taking the attitude of 'let's try this, at a low investment level, and see if we can get it to take off", that'd make sense. But buying land IN ORDER TO start a free range organic meat setup, especially without prior farming experience, I'm not saying that nobody ever makes it work but your odds are probably not good, specially not right now, sorrry.

Would it be possible to test the market by going halves (or whatever) with someone who *does* have the land, with a good written contract of course, so you could produce some 'something' and try to market it, once or twice around, and see how that goes? You'd have to ask around a lot to find someone who'd be interested, but I bet there's a reasonable chance you COULD find someone eventually.

Good luck,

Pat

 

[2dream]

Another thought - in my area - the cost of becoming certified organic would out weigh the benefits of the tax cuts. Anytime you have a business there are always hidden taxes and fees. Add in that the area I live in is a farming community to start with and home grown is the norm even if it is not certified organic. Competition is stiff around here.

Along with the certifications comes inspections. So be prepared for inspections (here charged to the business) and in my state you have to recertify annually by submitting your records, inspection reports along with a "small fee" of course.

Each city, county and state are different. Some give breaks trying to pull in new business. Some make it so difficult and expensive (like my greedy politicians which suffer from "the good ole boy syndrome") that you just throw up your hands and say forget it.


Edited for spelling and I have my glasses on.