If you grew up on a farm, you were likely helping with the operation since you were a child. I remember feeding calves in the middle of winter and being enlisted to help rake hay in the summer. Was I a ‘beginning farmer’ during my childhood?
No. A beginning farmer, for the purposes of governmental programs, is typically defined as an individual who has farmed for less than ten years. How do you measure whether a person has farmed? The easiest and most convenient method is federal income taxes, or whether a person has filed a Schedule F. Schedule F is the tax schedule which details farm income.
If you are a beginning farmer, what does that mean for you? Several important programs are available to you. A review of some of those programs for Nebraska farmers is here and South Dakota here. Each of these programs will be discussed in further detail in later blog posts. (But if you have a question now, don’t hesitate to ask!)
But what if you are not a beginning farmer? Why should you be interested in the above information? Some of these programs, such as the Nebraska Beginning Farmer Tax Credit, depend upon matching beginning farmers with established farmers and ranchers with agricultural assets. The established farmer or rancher receives a three-year tax credit (or a dollar-for-dollar reduction in Nebraska income taxes owed) for renting to a beginning farmer. The established farmer also can begin a relationship with the beginning farmer. That relationship has the potential to develop into a method of transitioning the farming and ranching operation to the younger generation, while also possibly ensuring retirement income. This type of orderly and well-planned transition is more likely to allow you to meet your goals (e.g. keep the operation in the family).
Legal Aid of Nebraska’s Farm and Ranch Project can assist both beginning farmers and ranchers and those farmers and ranchers considering business transition and succession. Legal Aid offers workshops, one-on-one clinics, assistance via telephone or email, and other arrangements. Feel free to contact us!