How Do I Turn My Land Into a Farm?
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Here is my latest correspondence with Ivan, an aspiring farmer.
What are the requirements to turn my land into a farm?
Ivan Toby A. Farmer
Plant some seed, then post a sign that says “Ivan’s Farm”.
I know that sounds silly, but I’m at least 50 percent serious (which for me, is way above average).
The fact is, there is no North Carolina law that establishes a universal set of criteria for what counts as a farm. Five hundred acres in Hyde County? Call it a farm. Ten raised beds on an urban lot? Call it a farm and raise your veggies. Neither the State of North Carolina nor the federal government requires you to get any type of license or certification or approval to identify your land as a farm.
There are, however, criteria you have to meet to qualify for certain farm-related incentives, such as:
- discounts on sales and property tax
- cost-share programs
- government loans
- exemption from certain zoning rules
Plus, there are rules that come into play for the production of certain crops and commodities. Here are a few examples:
- Produce growers are subject to regulations in the Food Safety Modernization Act (although many small growers are exempt)
- Animal operations above a specified number of animals are regulated by the North Carolina Animal Feeding Operations Program
- Selling plants normally requires a certificate from the NC Department of Agriculture and Consumer Services
- Your local municipality (e.g. town, city or county) may have zoning or other restrictions that affect how you can use your land.
And lastly, you may have to meet specific requirements for certain buyers or markets, such as:
- a grocery store may require you to carry a certain amount and type of insurance.
- Institutional buyers might require some type of certification, such as Good Agricultural Practices.
Below I’ll cover some of these topics in more detail. Also be certain to check out the Beginning Farmer page at NC State Extension’s Local Foods Portal, which includes a multitude of additional resources.
Farms which meet certain acreage and income requirements qualify for reductions on property taxes. The criteria are set by NC state law, but implemented by the tax office in your county. See complete details online, or contact your county tax office.
Sales Taxes on Items You Purchase
Farmers who meet minimum farm income requirements qualify for a sales tax exemption when purchasing certain types of equipment and supplies that are used in farming. The criteria are set by NC state law. Find more details online, including an application form.
Various government entities offer programs that benefit farmers, such as cost-share programs for certain agricultural practices, or low interest loans. For example, there might be a program that would pay a portion of the cost of installing a soil conservation practice, or a subsidy to purchase crop insurance. These types of programs are available from agencies such as the USDA Farm Service Agency, USDA Natural Resources Conservation Service, and the Soil and Water Conservation District. Generally, the first step in qualifying for these programs is to apply for a USDA farm number. Visit your local USDA Farm Service Agency office for details.
There are a few private organizations that offer grants to farmers (note that they are limited and usually competitive). Since they are private organizations, they will set their own criteria.
State law in North Carolina provides an exemption from certain zoning requirements for “bona-fide farms”. There are four possible ways to qualify as a “bona-fide farm”:
- Sales tax exemption number from NC Department of Revenue
- Schedule F from federal income tax return
- Enrollment in Present Use Program for property taxes
- A forest management plan
The nuances and details of this law and its implications are beyond the scope of this article and the expertise of the author.
There is no universal license or certification that farmers are required to have. However, a license or certification is required for certain specific activities.
- Selling plants – In most cases, selling plants requires a certificate from the NC Department of Agriculture and Consumer Services. Get more information about Nursery and Selected Plant Certification in NC.
- Pesticide applicator license – Required if you want to buy and use Restricted Use Pesticides. Get more information on Pesticide Licensing and Certification in NC.
- Good Agricultural Practices certification for produce growers – Required by certain buyers at their discretion, especially large wholesalers and institutional buyers (e.g. schools, hospitals). Get more information from NC State Extension’s NC Fresh Produce Safety website.
- Organic certification – Required by certain buyers at their discretion. Get more information on USDA Organic Standards.
- Animal Welfare Approved – Required by certain buyers at their discretion. Get more information from the Animal Welfare Institute.
- Business/privilege license – Your local government (town, city or county) may require a business license for certain activities such as operating a retail outlet.
- Certified Roadside Market – Not required, but may be an opportunity to make your enterprise stand out from the pack. Get more information from NC Farm Fresh.
- Meat Handler’s license – Required if you will receive, store, transport or sell meat/poultry. Get more information about Meat Handling businesses .
There is no law that requires you to have insurance on your operation, however you would be foolish not to put some thought into how to protect yourself. You may, for example, want to have insurance that covers you in case someone gets injured on your farm, or if someone gets sick from consuming a product you sold them. Talk to a professional to get advice on this.
- Labeling – Certain products (e.g. eggs, canned goods, meat) offered for retail sale must contain labels, with various laws or regulations specifying the information to be included. Depending on the product, requirements may include items such as name/address of the producer, quantity, ingredients, etc. A good starting point to determine which requirements may apply to your situation is the Food & Drug Protection Division of the NC Department of Agriculture and Consumer Services.
- Zoning laws – Your municipal government (town, city or county) may have zoning laws which specify what activities are allowed on your property.
- Charging sales tax – For raw products that you grow on your own farm, you may sell them without charging sales tax. However, you are required to charge sales tax if you process the products (e.g. turn strawberries into jam) or on any products that you didn’t grow yourself. Contact the NC Department of Revenue for details.
- Selling eggs – No license or certification required, but you must adhere to certain requirements for labeling, sanitation, etc. Get more information on North Carolina Egg Law.
- Selling poultry – Farmers may slaughter up to 20,000 birds each year without any inspection requirements, but must meet specific requirements. Get more information from the NC Meat and Poultry Inspection Division.
- Selling meat other than poultry (e.g. beef, pork, mutton, etc.) – If offered for sale, it must be slaughtered, processed and packaged in an approved facility. The Directory of Establishments Inspected by NCDA&CS Meat and Poultry Inspection Division provides directories of various types of facilities.
- Selling processed foods – Certain products may be processed (e.g. canned, preserved, etc.) in your home kitchen if your kitchen meets certain requirements. You will need to have it inspected by the NC Department of Agriculture and Consumer Services. Otherwise, processing must be done in a commercial kitchen. Get more information about starting a home-based food business.
- Selling processed foods that are acidified – Seller must attend the Acidified Foods Manufacturing School offered by NC State University. This includes pickles, salsa, pickled eggs and more.
Note that this is by no means a comprehensive list of regulations that may apply to your operation. You are strongly advised to contact your local Extension Agent and other professionals for further information and advice.