So, what’s a farm number and why should you consider getting one? First, a little background. The farm number is one of the three ways you identify yourself as a farmer for government purposes. It is also how the US Department of Agriculture’s (USDA) offices identify your farm for all of their programs. The USDA farm programs are administered on the local level through county-based Farm Service Agency (FSA) and Natural Resources Conservation Service (NRCS) offices. The FSA office is where you register to get a farm number. You must have a farm number in order to apply for FSA farm loans, disaster assistance, and crop insurance as well as for NRCS programs like Environmental Quality Incentive Program.
A farm number identifies yourself as a farmer for government purposes. However, the farm number remains associated with the land, not the farmer. Similarly, the history of production remains connected to the farm number. So if you decide to sell the land, the farm number and production history remain part of the value of the land.
Benefits of Obtaining a Farm Number
- Registering your farm means that when programs become available that could be useful to you, you will already be in the FSA system and ready to apply. If you join FSA’s mailing list, you can also be one of the first to know when a new program is announced.
- With a farm number, your farm will be counted in the Agricultural Census. Accurate data on the number of farms in your county could translate into more resources to support farms in your area.
- A farm number makes you eligible to elect FSA County Committee members. FSA County Committees help prioritize programs for your county.
How to Get a Farm Number
- Make an appointment with your local FSA office. The office is usually in the same building as the Cooperative Extension. Look here for county office info.
- Prepare to spend 30 minutes to an hour with the office.
- Bring along documentation of your identity and, if applicable, your farm business identity, like your driver’s license, social security card and EIN#.
- Bring along proof of control of the land, which can be a deed, a lease or rental agreement, or other land tenure documents.
- The FSA staff will locate your farm parcel through the county GIS system, check to see if it already has a number, and if not – issue you a number. Farm numbers are issued for free.
Three Ways to Identify Yourself as a Farmer
A Farm Number is the first way that farmers can identify themselves to the government in order to access various USDA programs, elect FSA County Committee members, and be counted in the Agricultural Census.
The second way is Filing your IRS Schedule F on your Federal taxes. On your federal income taxes, filing a Schedule F establishes your farm income. This is important if you ever want to take out a farm loan or participate in revenue-based crop insurance. Unlike the farm number, the business entity EIN goes with the farmer or farm business entity and is set up through the IRS.
The third is Agricultural Land Valuation. Agricultural land valuation has to do with your property taxes which are administered through your county-level tax office and is different from tax exemption.
Registering for a farm number, filing your Schedule F and getting an agricultural land valuation all establish you and your farm. Doing them will help you establish that you are a farmer to be able to get an agricultural sales tax exemption. However, getting a farm number is NOT the same as getting agricultural tax exemption. To do this, you need to register with the NC Department of Revenue.
Are you a hobby farmer or is this a business?
One important factor in establishing yourself and your farm with the appropriate agencies is the distinction between being a farm business or a hobby farmer. “Hobby farmer” is an official IRS distinction with significant financial implications. If it’s a hobby farm rather than a business, none of your farm expenses are tax deductible. For instance, if you are a horse breeder or trainer who sells or trains horses as a business then any feed expenses are tax deductible. However, if you keep horses for non-income deriving reasons, then expenses are not tax deductible.
Frequently Asked Questions
Is there a minimum acreage? There is no minimum acreage to register as a farm.
What if it is a recent land purchase? If you purchased your land in the past few months, you must bring your registered property deed to the FSA office, as the system may not be updated to recognize your name associated with the property.
Do they check? If you sign up for a program, be prepared: FSA will perform random spot checks to verify that you are doing what you claim to be doing on your farm.
Is there a cost? Getting a farm number is free!
Thanks to Kate Brun of Lucky Leaf Gardens, whose question inspired us to write this post, and Claudia Austin, County Executive Director for the Chatham County, NC office of the USDA Farm Service Agency for her great assistance and information.
Ready to get started?
Taking over the family farm?
Trying to transition your farm to higher value markets?
Here are more resources to help you get started:
- Grants and other resources for farmers
- Goal Setting for your Farm and How Goals Connect to Records – webinar recording and related resources from Grow North Texas
- Disaster preparedness and recovery resources
- USDA New Farmers Website
- NCAT ATTRA Sustainable Agriculture Program
- The Farmer’s Guide to Development of New Farm Enterprises – This guide includes information on developing value-added products, identifying new farm opportunities, on-farm processing, selling your products, and more.
- Farmer and Lender Project: Strategies to Sustain Agriculture and Enhance Rural Development in North Carolina – This report examines barriers to agricultural finance in North Carolina, and looks toward a system of debt finance that allows lenders to work with innovative farmers.
- Farmer’s Guide to Agricultural Credit & Factsheets
- Disaster Programs and the Changing Face of Agriculture in North Carolina
- Managing Speciality Crop Risk in North Carolina (2013)