How Do You Start a Farm?
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It’s certainly debatable whether I’m qualified to answer this question, but I will nonetheless give it a try. I’ll answer as though I’m the one doing the farm starting and explain the approach I’d use. I’ll also suppose that I already have land.
Further, I’ll stipulate that the primary goal of my farm starting effort is to generate a profit. There may be other secondary goals (e.g. lifestyle, self-sufficiency, enjoyment, family legacy, etc.), but in this hypothetical case profit is essential. I’ll also stipulate that the profit will be supplemental income, i.e. I won’t be dependent on it for my livelihood as that comes from stock dividends (hey, as long as I’m pretending).
I would start with a thorough inventory of resources in my direct control, including soil, water, structures, fencing, materials, equipment and utilities. Maybe it would look something like this:
10 acres of property consisting of:
- 5 acres of slightly sloping unfenced pasture with relatively fertile soil
- 2 acre homesite
- 1/2 acre pond
- 2.5 acres of scrubby woodland
- Small equipment shed (15×20)
- Garden tiller
- Riding mower
- Electrical service at house
- Municipal water service at house
- Well producing 20 gallons per minute
- Broadband internet access at house
As you can see, I’ve got some basic infrastructure in place, including a good water supply, some open land, and access to electricity and internet. These are vital, but I’m definitely lacking in the farm equipment and workshop/storage arenas.
Next I would determine the total amount of my own money that I was willing to put at risk, and how much I was willing to borrow. In determining those figures, I would assume that the risk of failure (i.e. losing my money) was at least as high as the risk for new businesses in general, and probably higher since agricultural enterprises involve unique risk factors (e.g. weather, pests) and steep learning curves.
In this hypothetical situation, I had saved up $40,000 for an Everest Expedition but had to cancel due to a stubbed toe. So I’m willing to put that money into this farm venture, but I do not plan to do any borrowing.
Now I would decide what amount of profit would be satisfactory to me. Until I confirm or calculate otherwise, I’m going to assume that almost any farm enterprise would require a time investment of at least 25 hours per week, and possibly much more. If that’s true, then I will be happy with an annual profit of $10,000. That means my wage will be about $8 per hour, but I’ll also be experiencing the intangible benefits of fresh air, sunshine and dirty fingernails, so it’s worth it.
Next I would list all the enterprises that could realistically be implemented on my property. As a new farmer I’m going to select a single enterprise to keep things simple, at least initially. In this case, with 5 open, fertile acres and a good water supply my list of options might look like this:
- Small ruminants (e.g. sheep, goats)
- Medicinal herbs
- Christmas trees
- Poultry (either for meat or eggs)
As a risk management strategy, I would not include items on my list that did not have a strong existing market and well established production methods in North Carolina.
As a “quality of life” management strategy, I would eliminate any enterprises that prevented me from taking an occasional vacation, including a few weekend getaways, plus a couple of trips to the beach or mountains for several days at a time.
I would then eliminate enterprises that obviously require an investment greater than my $40,000 in savings. Strawberries would likely fall on the chopping block, since a 50 horsepower tractor is all but essential.
Now it’s time for some basic market research on the remaining listed items. I’d want to have a clear picture of where I could sell moderate quantities of product and at what price. I would likely focus on opportunities to sell within a 45 minute drive of the farm. I would anticipate that this step could take at least several months to complete. Here are some strategies I might use in my research:
- Contact the nearby mom & pop grocery stores (if any) to determine what they might purchase and their requirements for quantity, packaging, quality, etc.
- Contact the nearby locally owned restaurants with the same questions.
- Visit all the farmers markets within a 45 minute drive (2 or 3 visits each) to assess customer flow, product selection, prices, etc.
- Visit any local farm stands or “pick your own” operations to research products sold, prices, customer flow, distance traveled by customers, etc.
- Try to determine if there were any successful subscription based farm operations (i.e. community supported agriculture) in the area.
- Try to find out if there were any wholesale market opportunities in the area, what quantities they needed and what price they offered.
At this point I think I’d be ready to narrow down my list. I would probably pick two or three that I felt had promise based on my research. Let’s say I chose blueberries, medicinal herbs, and Christmas trees.
I’d next want to generate a realistic estimate of the total capital investment required to establish the enterprise and keep it going for two to five years. Enterprise budget templates produced by land-grant universities might help me generate these estimates. If any of those estimates exceeded my savings, they would be ruled out.
Now I would use those same budget templates to analyze the profit potential of each candidate enterprise. I would eliminate from consideration any enterprise that did not have a strong potential for meeting my profit expectation ($10,000 per year).
If at this point, there were two possible enterprises remaining, I would flip a coin. If there were more than two, I would write each one on a slip of paper, put the paper slips in a hat, and draw one.
Having put all that work into research, and feeling confident of my choice of enterprise(s), I would proceed to obtain details on recommended production methods from NC State Extension. Using that as my guide, I would start planning field layout, irrigation systems, infrastructure construction, etc. I would also research cultivar recommendations and identify seed/plant sources.
Now, it might seem like at this point I would need to get some license or certification or permission from some regulatory authority, or register with a government agency. But for the most part, with the exception of activities that are prohibited by local zoning regulations, I should be good to start breaking ground and planting. And even if there are zoning related restrictions, operations that qualify as “bonafide farms” may be exempt. Contact your local zoning authority for details and to find out if your proposed operation qualifies.
There also seems to be a misconception that farms are required to get a Farm Number from the United States Department of Agriculture. While there are significant potential benefits, it’s absolutely fine to proceed without one.
That being said, this is not to suggest that my little 5 acre blueberry operation is free from any and all regulation. This is an area that will require further and ongoing research as I proceed. Here are some examples of activities on my farm that might be regulated:
- Farm operations that can impact food safety (e.g. manure applications, irrigation, harvesting, etc.)
- The use of pesticides
- Any processing of my harvest (e.g. turning blueberries into jam)
- Hauling products and equipment, if certain vehicle size and cargo weights are exceeded
Note that this is not intended to be a comprehensive list. Also note that I’m not suggesting that government agents will be visiting on a monthly basis to scrutinize every aspect of my operation. For the most part, I just need to stay informed, get some training, pay attention and keep good records.
At this point, I think it’s safe to classify my hypothetical farm as “started”. It’s also safe to say that the real work (but also the real fun) is just beginning.