Funding & Finances
Funding
Fundamentos de las donaciones alimentarias y el trueque en una granja
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16 min read
Promissory Note Toolbox
Book
5 chapters
Legal Aspects of Purchasing and Financing Farmland
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60 min read
Financial Resilience
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Financial Questions:
How does joining forces with other farmers/ranchers on a new venture impact business structure decisions?
Farm partnerships come with inherently more risk and reward than going at it solo. Here’s what you need to know to partner up while maintaining maximum legal resiliency.
Farming with other people – friends, family, romantic partners, and business partners – can be enjoyable and beneficial. But, partnering up can also come with some challenges, legal and otherwise. Many farmers and ranchers consider the personal liability risks of a general partnership to be too great so they’ll take the opportunity to form a business structure. To find out if this is the case for you, read Chapter 3 of the Farmers’ Guide to Business Structures, titled Sole Proprietorship and General Partnership Fundamentals (26pgs.). In that chapter, you’ll learn the ins and outs of those default business structures, including the inherent benefits and risks of partnerships. For example, partnerships can require less paperwork, BUT they do not offer personal asset protection. If you don’t want to be personally responsible for your partner’s actions, read up on forming a separate business structure in the pathway: I’m not sure which business structure is the right one for my farm/ranch. Where do I start?
Getting a grip on farm sales agreements, generally
You’ve worked so hard to grow beautiful brassicas and to-die-for daikon radishes. Now you need to get them into the hands of your customers. How do you do minimize complications and maximize success? Check out our free Farm Sales Agreements Basics, a tip sheet that addresses some of the most typical farm sales issues. If listening is more your jam, check out our free 29min. long Podcast Episode Six: Will Sign for Food!, to hear from some farm sales agreements experts on the issues that matter most in this arena.
Comparing market channels, legally speaking
So much of the farmer’s focus is naturally on the growing part. Getting outside and getting your hands in the dirt is a big part of why you chose this profession. But, you can’t forget that the selling part is just as important. Do you sell to restaurants? At farmers’ markets? To grocery stores? Do you start a CSA or have a farm stand?
If you are still exploring this decision and need a comparison of the legal perspectives on each, the Legal Considerations for Choosing Direct to Consumer Farm Markets (20pgs.) provides helpful guidance. It explores the legal risks and benefits of different market channels with an eye to small-scale producers.
What legal issues should I be aware of if I buy farmland?
Buying farmland is no joke. It’s expensive, time-consuming and just plain difficult. But if done right, it can maximize your legal resiliency. Here’s how…
Buying farmland is an exciting and nerve-wracking endeavor, and usually involves forking over a significant chunk of change. Before you spend your hard-earned cash, it’s a good idea to make sure you are thinking through the potential legal issues that may arise when purchasing a farm. To help you do this, start by reading the Basics of Due Diligence on an Agricultural Parcel. This short tipsheet will walk you through researching the costs, responsibilities, and opportunities associated with a potential farmland acquisition. If you’re particularly harboring concerns about zoning and would like guidance on (a) how to research your zoning code and (b) how to move forward concerning a zoning code challenge, read Strategies for Navigating Zoning Codes and Challenges.
Help with negotiating and drafting agreements
If you are in conversation or negotiation around a sales agreement, you will find our resource, Farmers’ Guide to Negotiating and Drafting Agreements (31pgs.) very useful in helping you through this process. This resource will boost your negotiation and drafting skills. After working through it, you should know how to skillfully negotiate a successful deal, understand the benefits of entering a written contract, understand the guidelines for drafting a contract, know what makes an agreement a legally valid contract, and know when to seek the help of an attorney.
Does my farm or ranch have to pay overtime to workers?
Find your way to the best resource to answer your questions about overtime obligations.
Great question, we’re so glad you asked!
If a farm assigns exclusively agricultural labor, the answer depends on the state in which you are located. Most states do not require farms to provide overtime pay for all hours worked over 40 in a week, which is the federal rule. For the answer in your state, check the Overtime section of our Selected Essentials in Farm Employment Law (10pgs) resource for your state.
Help me understand my payroll and tax obligations to farm workers.
You’ve found great workers for your farm! Now what? Taxes and paperwork of course…we help you get a handle on tax and payroll obligations for new employees.
This issue can get complicated in a hurry. We’ll keep it simple while pointing out the key thresholds.
If the farm assigns non-agricultural labor, federal income tax withholding, federal unemployment insurance (FUTA) tax, and social security/Medicare tax (FICA) apply right away.
What is the minimum wage rate and do I have to pay it?
We all know about the minimum wage, but did you know that it doesn’t apply to farm labor in some states? Check out the resources below to learn more.
The honest answer is that some farms are not legally required to pay at least the minimum wage. However, most farms offer well above the minimum wage in order to attract a qualified workforce. Still, it’s helpful to know what the rules are– especially for farms that are crafting unique internship and apprenticeship opportunities where the obligation to provide the minimum wage influences how those farms can offer wages in the form of food and housing.
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