Taking on farming life can be incredibly rewarding, but it also requires dedication and hard work. Farmers must possess a wide range of knowledge, skills, and abilities to be successful.
But perhaps the first and most essential requirement for becoming a farmer in Alberta is access to land. Farmers need plenty of available space to grow crops, raise animals, store equipment, and build infrastructure. That’s why we’re here to help you navigate the complexities of farm ownership in Alberta.
We’ve put together this article to break down everything you need to know about the farm status application process in the province. We’ll talk about the differences between a hobby farm and a full-fledged commercial operation and even guide you through some essential resources for new farmers.
So, whether your dream is to raise cattle or grow delicious Saskatoon berries, we’re here to help you turn that dream into a reality.
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How To Qualify As A Farmer In Alberta?
The agricultural sector in Alberta is a thriving and rewarding industry, offering numerous benefits for those who choose to embrace the farming lifestyle. But the question is: can anyone be a farmer in this province? It depends on who you ask.
You can always consider yourself a rancher or farmer once you buy the next farmhouse for sale available. But to enjoy financial benefits and avoid legal confusion, you should take time to meet obligations such as the following:
- You must produce at least one agricultural product for sale: To be considered a census farm by Statistics Canada. This includes crops, livestock, poultry, animal products, and other agricultural products.
- The property must be in agricultural production in your municipality: This is necessary to avoid confusion in taxation. Your ranch has to be taxed at the farm property tax rate. Otherwise, you’ll risk getting a higher annual tax bill.
- You must claim income from farming activity: The CRA (Canada Revenue Agency) won’t let you offset all your farming losses if you have a full-time job. The CRA considers you a part-time farmer if your off-farm income exceeds your farm income. And they only consider you a farmer if your farm business shows potential for profitability. If you need help determining whether you qualify as a farmer, consult a tax professional.
- Reach $10,000 in gross annual farm production: This is crucial for qualifying as a farmer and accessing the Alberta Farm Fuel Benefit and other federal-provincial farm programs.
Ask Yourself: What Will I Be Farming Anyway?
Standard options include:
- Crop farming: Growing grains like wheat, barley, canola or oilseeds.
- Vegetable farming: Producing crops like carrots, potatoes, onions and more.
- Fruit farming: Growing tree fruits like apples, cherries or pears, or bush fruits like Saskatoon berries.
- Cattle farming: Raising beef cattle, dairy cows or calves.
- Sheep or goat farming: Breeding and raising sheep or goats for wool, fiber, milk or meat.
Regardless of the type of farming, always turn to professionals when handling the necessary paperwork for your future farm.
While the farm status application can sometimes seem daunting, taking the proper steps and researching will pay off in the long run. By following these, you can make your farm dreams a reality and reap the benefits of being an official farmer in Alberta.
What Are The Differences Between a Hobby Farm, Part-Time Farm, And A Commercial Farm Operation?
While Canada does not officially classify farming activities, the Canadian Revenue Agency classifies it into hobby, part-time, and full-time commercial farming. These classifications are based on the time and income devoted to farming activities. It helps the agency identify which farms can enjoy tax deductions.
|TYPES OF FARMING OPERATIONS|
|Hobby Farm||Part-Time Farm||Full-Time Commercial Farm|
|Revenue Expectations||None. You farm because you love it.||You run a farm business but have other jobs that let you gain more income.||Your main source of revenue is from your farm business.|
|Management of Expenses||You can claim the money you spend on farming expenses on your taxes, but you can only claim as much as your declared income.||You can subtract the money you spend on farming and your other job from your taxes.||You can subtract the money you spend on farming and your other source income from your taxes.|
|Tax Treatment Of Losses||You cannot subtract losses from your farm income on your tax return.||You can only subtract a maximum of $17,500 in losses from your farming income in one year. You can carry forward any losses that exceed this amount for up to 20 years and use them to reduce your farming income in future years.||If you lose money on your farm, you can subtract that loss from any other income you have.|
Suppose you aim to enjoy tax deductions or join agricultural programs. In that case, you must research and consult a professional to ensure you meet the requirements for the type of farming operation you plan to have
How to Go From Hobby Farmer to Full-Time Farmer
Now that you understand the differences between hobby, part-time, and full-time farms, think about which category fits your situation and goals best. Consider these factors before you start on that farm status application:
- The amount of time and money you can realistically invest
- Whether you want farming income to supplement or replace your primary income
- The scale of farming operation required to meet your income needs
Start small and scale up gradually. Even full-time farmers often begin as a hobby or part-time operations. Focus on:
- Building farming skills through experience, mentorship and education
- Improving processes through data tracking, technology and efficiency gains
- Diversifying your farm products and revenue streams over time
While financial success takes time, the non-monetary benefits of farming can be rewarding from day one. Farming allows you to:
- Work outside and live closer to nature
- Produce useful products and food that nourish others
- Develop practical skills and self-reliance through hands-on work
Keep passion and purpose at the center as you navigate the administrative and financial complexities. You can transform your farming dreams into a sustainable reality with patience, resilience, and the right support network!
How To Get Farm Funding Or Loans?
Currently, the province doesn’t provide funding for new farmers. The Canadian Agricultural Loans Act (CALA) program can help if you need financing to start your farm.
The CALA program facilitates financing to beginning farmers by providing government guarantees to loans made by private lenders. This can reduce the risk for lenders and make it easier for new farmers to access the financing they need to get started.
AFSC’S The Revolving Loan
AFSC offers loans for young farmers, farm transfers, farm equipment, crop inputs, livestock, etc. Their Revolving Loan program is also available for producers who need ongoing financing for operating expenses. To apply for a farm loan or revolving loan with AFSC, you must take note of the following:
- Who Is Eligible?
- Canadian citizens or landed immigrants
- Companies incorporated in Canada and registered to operate a business in Alberta
- What Documentation Should I Get?
- Three years of financial statements/income tax history
- Birth certificate or proof of Canadian citizenship for non-corporate applicants
- Bill of sale/offer to purchase for asset purchases
- What Application Forms Should I Sign?
- Application for Loan
- Personal History
- Statement of Assets and Liabilities
- Credit Information Request
- Farm Operating Statement
Farm Credit’s Young Farmer Loan
Farm Credit Canada offers an assortment of different loans for beginning producers as well. Their Young Farmer Loan program is specifically designed to help producers under 40 who are just starting. They also offer financing for farmland purchases, equipment, livestock, buildings, etc. To apply for an FCC loan, you must provide the following:
- Who Is Eligible?
- Be a Canadian citizen or permanent resident
- Be under the age of 40 on the date of the loan application
- Have a sound business plan
- Have the ability to repay the loan
- What Documentation Should I Get?
- Personal Information
- Business Information
- Financial Information
- What Application Forms Should I Sign?
- Complete an application form
Before applying for a loan, it’s essential to do your research and ensure that you meet the eligibility requirements. AFSC and FCC have specific criteria that applicants must meet to be considered for financing. However, if you’re serious about becoming a farmer in Alberta, these loan programs can be a great way to start.
Fulfilling Your Farm Status Application Is Just The Beginning
To sum it up, the journey to becoming an official farmer in Alberta involves meeting specific criteria and adhering to certain regulations. It’s crucial to recognize the distinctions between a hobby farm and a full-scale operation and understand the prerequisites for achieving farm status.
While owning vast expanses of land can be advantageous, even smaller acreages can lead to a successful farming venture. Just remember to comply with all regulations, secure ample funding and gather the correct information for a thriving farm.
As a leading land brokerage in Alberta, we at Hansen Land Brokers are always ready to guide you in acquiring the perfect farmland—from prospecting to paperwork. Contact us for more insights on launching your ranch or farm in Alberta.