New Law Would Adjust Standards for Small Ag Businesses

Ag Business

Many things have changed about the small agricultural business over the past 15 years. One thing that hasn’t changed however is the size standards by which the Small Business Administration defines small agricultural businesses.

For example, since 2000 the earnings standard for a small agricultural business was $750,000 per year.

What’s more, a single size standard has been used for agricultural businesses representing a diverse range of 46 different industry categories. And in all this time, no effort has been made to allow for huge changes in commodity prices, production costs and industry structure, according to a release from the House Small Business Committee.

The new legislation designated as the Small Agriculture Producer Size Standards Improvements Act of 2015 could change all that.

Subcommittee Chairman Carlos Curbelo says, “It seems to me that small farmers and ranchers have been neglected for too long “The size standard setting process for agricultural enterprises needs to be modernized. The existing statutory size standard does not account for changes in industry structure, costs of production, economic conditions, or other factors.”

Co-sponsored by Chairman Steve Chabot, Subcommittee Chairman Curbel and Subcommittee Ranking Member Grace Meng, this legislation updates the evaluation of small business size standards for small farmers and ranchers and will be reviewed every five years.

This move will allow for a more accurate reflection of the size of the agri-business. Taking into account for inflation in sizing the business will allow for more businesses to come under the umbrella of the SBA and thus qualify for loans and other benefits the SBA confers.

Jeff Beasley, the co-owner of Beasley & Sons Livestock in Creal Springs, IL testified on a panel, “The cattle operation my family owns today looks very different from how it started when you consider the market conditions and cost of production have changed significantly over time. The outdated size standards of the Small Business Act clearly do not reflect the needs of modern agriculture.”

Farm Tractor Photo via Shutterstock


JoAnn McFarland JoAnn McFarland is a Staff Writer for Small Business Trends. She covers breaking news such as new product announcements, government policy, acquisitions and other industry developments. She is a published author and comes from a family-business background.

6 Reactions
  1. How is size currently defined? Is it defined by the number of employees? That will hardly denote the size especially if the process is mostly computerized.

  2. Hey JoAnn,
    The standards should have been defined a long time ago.. Finally some reaction, but let’s see first if it would be permanent. ‘This move will allow for a more accurate reflection of the size of the agri-business. ‘ hope so. Thank you for the information.


  3. There aren’t any details here, but I like the idea. Hopefully it preserves the ethos of the small farms and this isn’t being pushed by big agriculture to squeeze more of their operations into an advantageous classification.

    • Hi Robert,
      Beyond the revenue cut off there isn’t much detail about what constitutes a small ag business — at least nothing the House Small Business Committee or Small Business Administration have chosen to make available. And there’s very little in the actual legislation either. The idea is that the new law would prompt the SBA to develop more detailed size standards and then to update them on a regular basis.

  4. That’s a good point Robert, Big Business has a tendency to try to take advantage of breaks made for smaller business.

  5. Wow there must be some really big ‘small agribusinesses’. This classification desperately needs refining.