Lean on USDA and others to equip yourself with the business knowledge to build your operation. After your USDA Service Center visit, establish your operation by registering your business and obtaining licenses, permits, and a tax ID number. You should also consider educational opportunities, business management components, and insurance.
Keep reading about establishing your business below, get an overview of the beginning farmer's journey, or jump to a different section of the farmer's journey.
1. Plan
2. Visit
3. Fund
4. Build
5. Sell
6. Maintain
Grow Your Business Knowledge
Attend field days, workshops, courses, or formal education programs to build necessary skills to ensure you can successfully produce your selected farm products and/or services. Many local and regional agricultural organizations, including USDA and Cooperative Extension, offer training to beginning farmers.
- Cooperative Extension offices address common issues faced by agricultural producers, and conduct workshops and educational events for the agricultural community.
- extension.org is an online community for the Cooperative Extension program where you can find publications and ask experts for advice.
- SCORE offers free mentoring, workshops, and online resources for entrepreneurs, small business owners, farmers, ranchers, and agribusiness.
Determine the Legal Structure of Your Business
A business structure refers to how a business is legally organized and can affect how a business is regulated, taxed, and more. Deciding the best structure for your business is one of the most important decisions you will make.
Decide which form of business ownership is best for you:
- sole proprietorship,
- partnership,
- Limited Liability Company (LLC),
- corporation,
- S corporation,
- nonprofit,
- cooperative.
The structure of farm business you choose may affect eligibility for certain USDA programs and will determine how and where you will need to register your business and which taxes you must pay.
The Sustainable Agriculture Research and Education (SARE) program provides guidance to help farmers decide which legal structure is best for your farm operation as well as detailed information about the characteristics and requirements of each legal structure. Review SARE's Farmers' Guide to Business Structures to learn more about business structures for farm operations.
Register Your Farm Business
Once you determine your business structure, you will need to obtain the necessary federal and state tax identification numbers to register your business. Registering your business and becoming familiar with your federal and state tax responsibilities will help you file your taxes accurately, make payments on time, and avoid potential penalties.
USDA has financial information and resources related to USDA program payments, asset protection, and the important relationships between federal and state income taxes and USDA farm programs.
Federal Tax ID Number (EIN)
As a beginning farmer you will need a federal tax ID number, also known as an Employer Identification Number (EIN). An EIN is used to identify a business entity, hire employees, apply for business licenses, permits, and more. The EIN is necessary for reporting to the IRS. You may apply for an EIN online.
The IRS provides an Agricultural Tax Center with numerous useful documents, including the Farmer’s Tax Guide that explains how the federal tax laws apply to farming.
State Tax ID Number
Tax requirements vary by state. Visit the SBA website to learn about your state’s laws regarding taxes and for specific steps on how to get a state tax ID number.
Obtain Business Licenses and Permits
Obtain the federal, state, and local licenses and permits required for your business. Licenses, permits, and other types of registrations vary by state and locality. Licenses and permits needed may also vary depending on the farm business activity and how those activities are regulated at a federal or state level. Review SBA’s Apply for licenses and permits page for more information. It’s also a good idea to contact your State Department of Agriculture to ask which licenses and permits may apply to them.
Purchase the Insurance You Need
Agriculture is an inherently risky business. Some risks are everyday business risks; some risks are brought on by natural disasters. Producers need to regularly manage for financial, marketing, production, human resource, and legal risks.
There are many types of insurance to consider for the business, employees, and the crops and livestock you may be producing. The following examples are some types of insurance to consider, but not all operations might need these. For example, if there are no employees in their business, they won’t need workers’ compensation insurance. Additionally, the laws requiring insurance vary by state so you will need to check your state website for any additional insurance you might need.
Liability insurance protects against claims resulting from injuries and damage to other people or property. Liability insurance policies cover any legal costs and payouts from the insured producer if they are found legally responsible.
Property insurance provides financial reimbursement to the landowner or renter of a structure and its contents in case of damage, theft or if someone else is injured on the property.
Crop insurance provides financial protection against losses due to adverse events including drought, excess moisture, damaging freezes, hail, wind, disease, and price fluctuations.
Workers' Compensation and Unemployment and Disability Insurance is required by the federal government for every business that has employees.
Health insurance can be purchased for yourself, family members, or as part of a benefits package for your employees. HealthCare.gov and USA.gov make available tools to help you understand what you need to know about new insurance options and other health care changes to help you find health-care related resources.
Life insurance can help protect your farm and help keep it in the family by providing money to pay for various farm expenses, from livestock to crops to new facilities.
USDA Crop Insurance
USDA’s Risk Management Agency (RMA) offers crop insurance to help you manage risk across your operation. Crop insurance helps mitigate production and revenue risks and supports a healthy rural economy. There are many types of insurance products available for a wide variety of production practices, including organic and sustainable agriculture. Beginning farmers and ranchers are also eligible for certain benefits designed to help as you start your operation.
Use RMA’s Agent Locator to find a crop insurance agent near you. Crop insurance may be required to receive loans.
Insurance is required when applying for a loan with FSA. Additional insurance and coverage period may differ depending on the type of loan.
An Agricultural Guide to Federal Labor Law
This video guides agricultural employers and advocates through compliance requirements under the applicable laws, and provides real world examples of compliant and non-compliant employment conditions and practices.
Video: Cultivating Compliance - An Agricultural Guide to Federal Labor Law
How to Start a Farm with USDA
Get an overview of the beginning farmer's journey or jump to a specific page below.
Find Your Local Service Center
Los Centros de Servicio de USDA son lugares donde usted podrá contactarse con la Agencia de Servicios Agrícolas (FSA), el Servicio de Conservación de Recursos Naturales (NRCS), o empleados de Desarrollo Rural para discutir las necesidades de su negocio. Ingrese el estado y condado donde vive en el buscador para encontrar el Centro de Servicio más cercano y las oficinas de las agencias mencionadas. Si este buscador no funciona en su navegador web, por favor visite la página offices.usda.gov
Visite la página web de la Agencia de Gestión de Riesgos (RMA) para encontrar una oficina regional o de cumplimiento o para encontrar al agente de seguros más cercano.
Para obtener material traducido en español, revise nuestra página web de Traducciones, busque su centro de servicio local o informe a un empleado.