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Background

The Agricultural Act of 2014 established or modified several USDA farm programs to increase the participation of beginning farmers/ranchers, women and minority principal operators (so-called socially disadvantaged farmers), and limited-resource farmers (based on their low farm sales and household income). Though not all Titles of the 2014 Act address the needs of all these "targeted" groups, provisions appear in Title I (Commodities), Title II (Conservation), Title V (Credit), Title VI (Rural Development), Title VII (Research), Title XI (Crop Insurance), and Title XII (Miscellaneous). See Agricultural Act of 2014: Highlights and Implications for more information.

Beginning Farm or Ranch

A family farm is considered a beginning farm when a farmer or rancher has not operated a farm or ranch for more than 10 years. This 10-year requirement applies to all operators, defined as members of an entity who will materially and substantially participate in the operation of the farm or ranch. Different USDA programs, with differing goals, may have additional eligibility criteria placed on the definition of a beginning farmer or farm. Because some farms have more than one operator, there are more beginning farmers and ranchers than there are beginning farms and ranches.

Limited-Resource Farm or Ranch

Limited-resource farms are defined based on low farm sales for 2 years and low household income for 2 years. Low farm sales are defined as less than $176,800 in 2014 dollars. This value is adjusted for inflation using the " Prices Paid by Farmer Index" compiled by USDA's National Agricultural Statistics Service. The cutoff for low household income is current-ear income below the national poverty level for a family of four with two children or income less than half of the county median household income. Previous definitions also considered a limit on farm assets. However, that requirement was eliminated because of the difficulty in verifying asset values on applications to participate in USDA programs. Instead, the requirement for a second year of low income—which is easier to verify than low assets—serves as an indication of persistently low income.

Socially Disadvantaged Farm or Ranch

A family farm is considered "socially disadvantaged" when the principal farmer or rancher is a member of a group whose members may have been subjected to gender, racial or ethnic prejudices because of their identity as members of a group, without regard to their individual qualities. Depending on the farm program, socially disadvantaged groups include women, African Americans, Native Americans, Alaskan Natives, Hispanics, Asians, and Pacific Islanders. Socially disadvantaged farmers have not necessarily experienced prejudices themselves.

These three targeted groups overlap somewhat. Combined, they represent 41 percent of all U.S. farms (see the table for general characteristics of the combined targeted populations Excel icon (16x16) . Because they are more likely than other farm households to operate small farms (the median size is 52 acres for the combined group versus 113 acres for farms not in the group), they account for a smaller share of the value of production (16 percent in 2012). They are also less likely to receive direct government farm payments than other farms.

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Last updated: Wednesday, October 08, 2014

For more information contact: James Williamson

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