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 The outdated size standards of the Small Business Act clearly do not reflect the needs of modern agriculture.”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