Limited Resource Farmer, Small-Scale Farmer and Beginning Farmer Fact Sheet

The 2002 Farm Bill changed some of the programs administered by the Natural Resources Conservation Service (NRCS) to better address Limited Resource Farmers (LRF) and Beginning Farmers (BF). A recent USDA Small-Scale Farmer Initiative successfully provided additional opportunity to reach under-served and/or under-represented clients.

What is a Limited Resource Farmer?

 A Limited Resource Farmer (LRF) has the following characteristics:

1. A person with direct or indirect gross farm sales not more than $102,400 in each of the previous two years, and
2. Has a total household income at or below the national poverty level for a family of four, or less than 50 percent of county median household income (to be determined annually using Commerce Department Data), in each of the previous two years.

An entity or joint operation can be a Limited Resource Farmer (Producer) if all individual members qualify as a Limited Resource Producer. The cost-share rate for a LRF in Tennessee for fiscal year 2006 is 90 percent. The Limited Resource Farmer tool at the following website link can determine if the applicant qualifies as a LRF: http://www.lrftool.sc.egov.usda.gov/

Eligibility as a LRF is based on the answers to four questions. Each step of this process has very clear instructions, including how to determine gross farm sales and total household income.

What is a Small-Scale Farmer?

The Small-Scale Farmer Initiative was announced by USDA Secretary Mike Johanns on March 15, 2005, for 11 states in the Southeast that included Tennessee. The purpose of the initiative is to improve technical services and participation in USDA Programs through improved outreach efforts to under-served clients and small-scale farmers. This initiative is available again in fiscal year 2006. A Small-Scale Farmer has the same characteristics as a Limited Resource Farmer, except the Small-Scale Farmer has less than the county median household income and less than 136 acres (the average Tennessee farm size), with no more than 100 acres of cropland. The cost-share rate for a Small-Scale Farmer in Tennessee for fiscal year 2006 is 75 percent. Contracts are limited to $10,000.

What is a Beginning Farmer?

A Beginning Farmer meets the following criteria:

1. Has not operated a farm or ranch, or who has not operated a farm or ranch for more than 10 consecutive years. This requirement applies to all members of an entity, and
2. Will materially and substantially participate in the operation of the farm or ranch.

In the case of a contract with an individual, individually or with the immediate family, material and substantial participation requires that the individual provide substantial day-to-day labor and management of the farm or ranch, consistent with the practices in the county or State where the farm is located. In the case of a contract made with an entity, all members must materially and substantially participate in the operation of the farm or ranch. Material and substantial participation requires that the members provide some amount of the management, or labor and management necessary for day-to-day activities, such that if the members did not provide these inputs, operation of the farm or ranch would be seriously impaired. The cost-share rate for a Beginning Farmer in Tennessee for fiscal year 2006 is determined by the Local Work Group for the particular county (the cost-share rate for BF may range from 50 to 90 percent).

Limited Resource Farmers, Small-Scale Farmers and Beginning Farmers can compete and be ranked and scored in all fund codes that meet their resource needs.

For more information, contact the Natural Resources Conservation Service office in your county. NRCS offices are listed in the telephone book under U.S. Government, U.S Department of Agriculture.

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