It seems there is always a debate about how big ag corporations are involved in farming. When people think about corporations, they are not thinking about family farmers–but more like “big fat ‘cats’ wearing suits sitting in a corner office.” The concerns are usually shaped around this type of comment:
Farm Corporations are reckless and will do anything to make profits, even at an animal’s or environmental expense.
I personally have had numerous conversations about what we do on our farm. It never fails to hear, “Well, I am sure you take care of your animals, but I know big ag corporations do not.”
It’s all about peoples’ perception of corporations: Uncaring, reckless and greedy
But then I continue, “even though we are a family farm, we are also a farm corporation.” That usually stops them dead in their tracks and they don’t know how to respond. Either they don’t believe me or completely ignore me. It’s like they don’t want to hear anything contrary to their beliefs. Simply, a family farm does not fit their definition of a farm corporation. So let’s take a deeper look into the issue of the “Family Farms vs. Farm Corporations” debate:
Farm corporations are family farms
The fact is the vast majority of farm corporations are family farms. USDA classifies family farms as “any farm organized as sole proprietorship, partnership or family corporation.” And therein lies the confusion. Many farm corporations are family farms.
How big are farm corporations?
Farm corporations come in all sizes. In fact, our farm corporation is a small family farm. Our “corporation” has two stockholders–my husband and I. We have one full-time employee employed by our corporation. In addition to our corporation, we are also a stockholder in another local sow farm corporation. The sow farm is owned by us and another 8-10 local farmers.
For an outsider, it is easy to assume that “big ag corporations” own these farms because they see farm “corporation” names such as ours in the picture. But it’s just the two of us.
So, why did we incorporate?
In a nutshell, there are business advantages. Even though we are a family farm, we are also a business. Being a family farm and a business is a very unique has a special relationship. It was not an easy decision to incorporate — it took us a lot of time, thought and analysis. But in the end, we chose to incorporate. It’s not a choice for everyone but it was a choice for us. And this is what I love about farming:
Farmers can choose what works best for them, whether it is the business structure, the size of their farm, the way they raise their animals or farm their land. They do what they believe in, know, and love.
What are business advantages to incorporate?
One advantage of a family farm corporation is the ability for our farm to continue seamlessly if another family member decides they want to enter our farming business, exit the business or if there is a death of a stockholder. At the time of incorporation, we didn’t know the future of our farm, but we knew we wanted the flexibility of continuity. Incorporating gave us the reassurance. Another business advantage is additional business deductions that were not available to us prior to incorporating.
What other changes happened as the result of incorporation?
The day after we incorporated, NOTHING changed on our farm in regards to day-to-day activities. We woke up in the morning, walked out to the barn and made sure the pigs had feed, just like every other day. Where things did change was in the farm office. Going to be honest here – we have more bookwork because of the corporation. We are “lucky” now to have two income tax appointments each year. (Don’t be jealous!) We have no regrets and are glad we incorporated.
Do you have any questions about farm corporations?
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