How Do I Obtain "Farm" Status in Alberta - Frequently Asked Questions

 
 
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 What do I have to do to be considered a farmer in Alberta?
There are several different definitions of a "farm" depending on who the owner(s) will be interacting with.

To be considered a farm for the Alberta Farm Fuel benefit (and be eligible to use marked or "purple" fuel) the farm business must have $10,000 or more of gross annual farm production. This $10,000 minimum production threshold is also required for most other provincial and federal-provincial farm programs.

For the municipality they will need to have the property in agricultural production for it to be taxed at the farm property tax rate. If the property is assessed in a different class e.g. country residential the annual tax bill will be higher. More information on property taxes can be obtained for your county or municipal district office.

For income tax purposes the Canada Revenue Agency (CRA) you are a farmer if you claim income from farming activity. To be considered a full-time farmer however the farm income will be compared to any off-farm income - if the off-farm income is higher the individual will only be eligible to only claim part of any farming losses against their other income. In addition the farm business must show a potential for profitability.

For the Farm Census completed by Statistics Canada, a census farm is defined as an agricultural operation that produces at least one of the following products intended for sale: crops (hay, field crops, tree fruits or nuts, berries or grapes, vegetables, seed); livestock (cattle, pigs, sheep, horses, game animals, other livestock); poultry (hens, chickens, turkeys, chicks, game birds, other poultry); animal products (milk or cream, eggs, wool, furs, meat); or other agricultural products (Christmas trees, greenhouse or nursery products, mushrooms, sod, honey, maple syrup products).

Anyone considering establishing a farm operation should obtain detailed information on these items from the appropriate level of government.

What is the difference between a hobby farm and a regular farm?
There is no commonly accepted definition of a hobby farm. One approach to making this distinction is to compare a hobby to a business. Webster's dictionary defines a hobby as "a pursuit outside one's regular occupation engaged in especially for relaxation." In most cases the recreational activities that we choose cost us money (for equipment, fees and travel etc.) yet we do not expect any income from them. On the other hand a business is defined as a commercial venture undertaken with an expectation of profit. Thus if you realistically expect to make a profit from your farming activities you have a farm business and if not you have a hobby farm.

I only have 20 acres. Can I still be a farmer?
It is impossible to categorize farming activity as hobby or not based solely on the number of acres used. Many fruit and vegetable producers can generate a good income from a small property - for greenhouse production this could be less than 1 acre.

My neighbour burns "purple" diesel and it is cheaper than what I can buy. Can I do this too?
You must qualify for the Alberta Farm Fuel Benefit, which requires that the farm business have $10,000 or more of gross annual farm production. Qualifying individuals are issued a farm fuel number which enable them to use farm license plates and to purchase marked or "purple" fuel in Alberta.

Can I get a government grant to start a farm?
No. Individuals who wish to start a farm business in Alberta are expected to use their own money. If additional funds are required they will need to secure a loan from a commercial lender. Farm loans specifically designed for beginning farmers as well as traditional farm loans are available in Alberta from Agriculture Financial Services Corporation (AFSC). Farm Credit Canada also offers a range of farm loans including several designed for beginning farmers.

Where can I get more information on starting a beef farm or a Saskatoon berry farm?
There is an abundance of information on this site (Ropin' The Web) so be sure to take the time to browse through the different sections. Agricultural industry associations can also provide valuable resource material - many have Web sites which are listed in the Links section of this site.

Alberta Farm Fuel Benefit
Canada Revenue Agency - Topics for Farming
AFSC - Alberta Farm Loan Program with Beginning Farmer Incentive
Farm Credit Canada - Farm Loans

Prepared by Dale Robinson, Ag-Info Centre, Alberta Agriculture & Rural Development

 
 
 
 
For more information about the content of this document, contact the Ag-Info Centre.
This information published to the web on August 1, 2003.
Last Reviewed/Revised on October 22, 2008.