Frequently Asked Questions
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How can I learn some farm basics? How can I teach them?
Agricultural Education programs help young and beginning farmers learn the ropes. Find out about educational programs by visiting the State 4-H Office, Maine Cooperative Extension and the Future Farmers Organization. Maine Agriculture in the Classroom (MAITC) reaches out to youngsters and gives Maine farming its rightful place in school curriculum. Other programs promote agriculture in the state by reaching out to non-farmers and educating them as well. The Beginning Farmers Resource Network is a coalition of Maine agriculture agencies and organizaitons that work together to connect aspiring, beginning, and transitioning farmers to resources for farm business success. Sometimes the best way to learn is by doing. Contact the Maine Organic Farmers and Gardeners Association about apprenticeship programs.
I want to farm in Maine, but I don't know how to get started.HELP!
If this is you, fear not. Maine has a welcoming community of people who support farming. Maine agriculture is a vibrant industry that's changing rapidly to keep pace with the modern economy. In 2007, Maine had just over 8,100 farms. This parallels the growth of Maine's local and specialty niche markets. Many farmers, veteran and newcomer alike, are finding crafty ways to diversify their production and market directly to consumers. Maine's diversified farms are complemented by a strong bulk export sector of several key commodities, including potatoes, eggs, dairy, and wild blueberries. In 2007, Maine farms contributed over $600 million to the state's economy. Maine farmers add fresh food to local markets, and their farms provide a scenic buffer between Maine's wilderness and its developed areas.
Maine has a variety of people and places who can help you find everything you need to start your farm. Call the Maine Office of Business Development (207-624-9804) to learn more about starting a Maine business. The Maine Department of Agriculture, Conservation and Forestry regulates farming, helps promote products and can assist in getting a business plan together. The Maine Cooperative Extension offers production advice and information on a wide variety of other topics. The Beginning Farmer Resource Network is a coalition of Maine agriculture agencies and organizations that works specifically with aspiring, beginning and transititioning farmers. For organic production, talk to the Maine Organic Farmers and Gardeners Association.
While planning what kind of farm you want, you should also tap the Maine Farm Bureau to learn about legalities, join a membership organization in your chosen interest, and talk to successful growers in your field. Perhaps the best way to get started is to visit and talk with other farmers who are in business already. Just about every commodity has an association of farmers you can join.
Here is a checklist for you to get started:
For starting a new farm operation, here is a checklist of what to do to get yourself started.
You can also go to www.getrealmaine.com and go to the resources page for additional answers to other questions you may have about running a farm business in Maine(1).
Step 1: IRS – Form. Apply for a Federal Employer Identification (EIN) Number or Federal Tax Identification number at www.irs.gov and click Online Services.
Step 2: Agricultural Employers Tax Guide. You will also want to get Publication 51 www.irs.gov/publications/p51/ar02.html which will tell you all you need to know about federal wage law and deductions you must make when you hire workers on the farm.
Step 3: Perishable Agricultural Commodities (PACA) License. The US Department of
Agriculture requires license for some larger farmers or those who buy and sell fresh produce. In general, any person who buys or sells more than 2,000 pounds of fresh or frozen fruits and vegetables in any given day is required to be licensed under the PACA. Wholesalers, processors, truckers, grocery wholesalers, and food service firms fit into this category.
A person who negotiates the sale of fruits and vegetables on behalf of another person is required to be licensed on the first transaction. A person operating in this capacity may be considered to be a commission merchant, broker, or a growers’ agent. A broker handling only frozen fruits and vegetables, however, is not subject to the PACA licensing requirements until the invoice value of the total negotiated sales exceeds $230,000 in a calendar year.
A person selling at retail is subject to a PACA license once the invoice costs of fresh and frozen fruits and vegetable purchases exceed $230,000 in a calendar year.
To apply for a license, to obtain more specific information about licensing requirements, or to find out if a firm is a licensee, call us toll-free at 800-495-7222. www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5089261
State and Local Requirements
Step 1: Visit your municipal office to see what licenses or permits are needed. These vary by community but may include retail license, building occupancy permit and victualer’s license and more.
Step 2: Establish a bank account. Several license applications will require completed bank account information. Start a recordkeeping system that will track income and expenses.
Step 3: If you incorporate, submit incorporation papers to the Secretary of State. If you are a corporation or wish to create one, it is recommended that you contact the Secretary of State at 207-624-7736 and speak to the Corporate Examining Section or visit their website at www.maine.gov/sos .
Step 4: Tax registration. Apply for a sales tax number and unemployment compensation number by visiting www.maine.gov/revenue - click on Sales/Use and Service Provider Tax. Call them at 207-624-9693 or send them an email at firstname.lastname@example.org or email@example.com
Step 5: Other Food Licenses. Apply for a particular food license with the Maine Department of Agriculture. Application fees vary and all are subject to satisfactory inspections. This Division also deals with milk and milk product licenses. Visit www.maine.gov/agriculture, click on the Division of Quality Assurance, Permits & Licenses or call them at 207-287-3741. Visit their office at Deering Building, Blossom Way, Augusta. .
Step 6: Food Stamps or SNAP. Applying to accept Supplemental Nutrition Assistance Program (SNAP) benefits at your farm is a simple three-step process: get a US Department of Agriculture account, fill out an application online, and mail your supporting documentation to complete your file. Visit www.fns.usda.gov/snap for complete information or call them at 877-832-4369.
Step 7: WIC Program. To obtain vendor authorization and subsequent training call 800-437-9300 or visit www.maine.gov/dhhs/wic. Acceptance is contingent on a satisfactory inspection and approval of food and pricing information. They have offices throughout the state. Visit www.maine.gov/dhhs/wic/vendors/form-authorization.shtml for a complete listing.
Step 8: Plant (Nursery Stock) License. To obtain a Nursery Stock license to sell plants, contact the Maine Department of Agriculture, Division of Plant Industry at 207-287-3891 or visit their website www.maine.gov/agriculture/pi/horticulture and click on licensing. Their office is located at Deering Building, Blossom Way, Augusta.
Step 9: Private or Commercial Pesticide License: To obtain a Private Applicator License to use certain pesticides, visit www.maine.gov/agriculture/pesticides or call their office at 207-287-2731. You are also responsible for the Federal Worker Safety and Protection Training, www.epa.gov/pesticides/health/worker.htm which are managed by the Pesticide Control Board as well.
Step 10: Hiring Help: If you hire help, you will need to comply with State Labor Laws. Here is a starter checklist of things to do or consider:
a. Have a brief job description so you and he are clear on what job duties are expected to be performed. You also need to have an employment application for your farm for an employee to fill out. Start one that asks for basic information, an emergency phone number in case of accident, and any other information (NOT age, sex or other religious preferences) you feel you want from the employee (such as references).
b. You need to have them fill out a W-4 http://www.irs.gov/pub/irs-pdf/fw4.pdf and and Form I-9 http://uscis.gov/graphics/formsfee/forms/files/i-9.pdf This sets up how much to withhold and also declares to INS that they are a legal citizen of the U.S.
c. As you pay the employee, you need to deduct and track the deductions for Social Security and Medicare. All agricultural employers must get a copy of Circular A, Agricultural Employer's Tax Guide, http://www.irs.gov/pub/irs-pdf/p51.pdf
which explains the withholdings limits for social security and medicare. You basically multiply the withholding percentage from the total wage, subtract and withhold the amounts and at the end of the year file a 941 form http://www.irs.gov/pub/irs-pdf/f941.pdf with payment of those withholdings to IRS. You then file aW-2 http://www.irs.gov/pub/irs-pdf/fw2.pdf and W-3 form with Social Security in February.
d. The State has a requirement for workers compensation depending on number of employees. You would be exempt so long as you have a farm liability policy: See law citation below:
"Agricultural workers, except seasonal or casual. An employer of 6 or less agricultural or aquacultural workers may alternatively secure the payment of compensation by obtaining an employer's liability insurance policy (total limit not less than $100,000 and medical payment coverage of not less than $5,000). Employers of agricultural or aquacultural laborers are not liable for securing compensation payment if the employer has 6 or fewer laborers, or the employer has more than 6 such laborers but the total number of hours they worked in a week has not exceeded 240 hours at any time during the 52 weeks immediately preceding the
e. An employer who uses pesticides must train the worker in pesticide safety. The information can be found at the Pesticide Control Board site http://www.state.me.us/agriculture/pesticides/wps.htm
f. An employer is required to post various employment posters. The Maine Labor Law Poster Service can provide those at a minimal charge (1-877-321-4144) or you can get them from the State http://www.state.me.us/labor/posters/index.html and Federal Labor Agencies http://www.dol.gov/dol/topic/youthlabor/Postingrequirements.htm
g. Minimum Wage - Agricultural employers who use less than 500 man-days of help in any one quarter are exempt from minimum wage at the State and Federal Level. A man-day is any day a person worked for more than 1 hour. ALSO, certain other types of workers are exempt, regardless including local hand harvest laborers, migrant hand harvest workers under 16 and employees who work on range production of livestock.
h. Overtime Pay - Ag employers are not required to pay overtime rates except those that farm with over 300,000 laying birds.
If you do not pay cash, then there are some exemptions from filing (See the Agricultural Circular), but my guess is that you will be paying out cash to this worker so the above applies.
Step 10: General Promotion of your business: You need to join groups who will help you market your products. A general commodity group listing can be found in the resource section of the getrealmaine.com website. You can also get marketing assistance through the Maine Department of Agriculture Division of Agricultural Resource Development at 287-3491.
Step 11: Maine Milk Commission Monthly Pricing Reports: The Maine Milk Commission sets the minimum retail price for milk every month. Milk may not be sold below set minimums. To obtain timely monthly price information, contact the Maine Milk Commission at 207-287-7521.
Step 12: Other Business Assistance: The Maine Department of Agriculture has a website for additional answers to business questions found at www.getrealmaine.com in the Resources section. In addition, Maine Cooperative Extension, http://www.extension.umaine.edu and Maine Business Works http://www.mainebusinessworks.org has information on business planning assistance.
(1) The following information was a compilation of information from the files of John Harker, Director of Market Development with the Maine Department of Agriculture, and the Maine Grocer’s Association. In addition, the Maine Grocer’s Association has a checklist for individuals wanting to start a food store. That information can also be found at www.getrealmaine.com. Wile this information was created for your use, it does not constitute a full detailed list of laws and regulations and all individuals and businesses should check with other sources of information as well.
How do I purchase farmland?
Before purchasing farmland, you need to envision the kind of farm you want to have and make sure the land fits your vision. What kind of natural resources are there? A vegetable farmer would want a small parcel of flat, loamy soil, whereas a sheep farmer needs larger tracts of rolling pasture. You also need to consider things such as water availability and climate (the growing season varies quite a bit along Maine's north/south axis). There are also legal issues. Does the land have any conservation easements on it? Endangered species habitats? What about water rights? Zoning laws? Proximity to towns also affects the decision to buy land; if your farm is far away from a population center and the roads are poor, it may be difficult to get things to market. You need to think about support services too such as are the right kinds of equipment, feed and fertilizer dealers nearby? If purchasing farmland gets overwhelming, do not fret; the Maine Association of Conservation Districts is there to help. Each county has its own SWCD, which is staffed by local farmers who will be sympathetic to your needs. If you want to acquire a working farm, Maine FarmLink connects aspiring farmers with retiring farmers who want their land to stay in use. To get money to purchase farmland, check out the USDA Farm Ownership Loans, or contact the Maine Department of Agriculture. For general information, contacting your local Farm Service Agency Service Center Office can also be helpful with getting you started.
What is USDA cost-sharing?
The USDA has several programs designed to assist and pay farmers to implement various practices and programs on their farm. Maine received $6 million in direct government payments in 2006. Contact your county Service Center Office of the USDA Farm Service Agency to learn more about programs that might meet your needs.
Where can I find agricultural statistics? How do they help me?
Agricultural statistics are the bedrock of good farm planning. They are your best guides for juggling the production of your farm with the off-farm world of markets. Statistics enable you to track production levels and prices of crops. Diversified farmers can use them to fit their crop budgets into the markets that are ripe for growth, while commodity farmers can use anticipated prices to set their production levels for maximum profit. The USDA National Agricultural Statistics Service keeps the most comprehensive data in the country. A statistics search almost inevitably leads you to their website or their regional office, the USDA New England Agricultural Statistics Service. This section emphasizes production and census data, not market trends and pricing information.