Kody Hanner
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What is the Difference Between a Homestead and a Farm?
The difference between a homestead and a farm is a big topic with no one clear answer as to what category you fall into or how the government views your operation.
What I can clearly quantify is that the federal government states that the definition of a farm is any agricultural operation that has or plans to make $1000 in a year in agricultural products. In many cases, a small farm can make $1000 from the sale of one beef cow, a truck load of hay, or regular milk customers. I would then need to ask if that truly makes an operation a commercial endeavor or if that should simply be considered a sustainable homestead.
I consider our agriculture endeavor a commercial homestead, in which I will explain what each of these means below. However, if I were working on programs with the USDA, I would be considered a small farm. And to make things a little more complicated, there are no clear statistics on how many small farms are out there, as most people do not know what constitutes one or consider their farm income substantial enough when they live on an off-farm income.
Hobby Farm or Hobby Homestead
Many people get wrapped up in what a homestead is because they associate it with the Homestead Act of 1862 and covered wagons heading down the Oregon Trail. Well, that’s not even where the name originally comes from either. Homesteading is staking a claim (buying, settling, homesteading) on a piece of property and then using that property for some level of sustainability. Meaning, the property provides for the owner through food, fiber, or income.
A hobby farm or homestead, first off, usually does not meet the $1000 income threshold to qualify as a farm. In fact, in many cases, it is actually financially burdensome because there are expenses associated with maintaining land and animal care. If there are no or few sources of income, then the costs of the farm are considered a choice through the form of a hobby. This is great if you are ok with it too! Farms can be a lot of fun and no one thinks twice about your neighbor collecting model cars as their hobby.
The main difference between a farm and homestead in this case, is that many times hobby farms in the true sense may have no tangible returns. This could include horses for leisure riding. You gain great joy from them, but not cash income or food. A hobby homestead is probably going to have multiple activities happening at once that have some form of tangible returns. Even if the homesteader is not selling products, they are probably benefiting in the form of non-monetary income. This includes food from gardens or eggs, making soap from goat milk, or baking sourdough bread.
Sustainable Homestead
A sustainable homestead, or even just a homestead, provides a large amount of the operator or family’s needs. This is a small to medium-sized piece of property that is used for cultivating gardens, crops, and livestock or other sustainable practices to support the family. The support will come in the form of both cash income and non-monetary income. I see this a lot where a family will raise a couple of pigs for the year, sell one and put the other in the freezer. They will then use the lard for cooking and candles, but use the income from the other pig for living expenses or to feed next year’s pigs. Either way, the family is benefitting from the homestead, but probably not receiving a substantial enough income to not still work in town, but may be considered a farm by federal standards. This is a great option for single income families to stay comfortable.
Small Farm or Commercial Homestead (Farmstead)
Both of these operations are making an income. And usually if you ask them what they farm, they are going to have a direct answer for you. Such as, I’m a hay farmer or a cattle rancher. Some of these entities are even making enough income to be their full-time jobs and even diversify into next level production like opening butcher shops for their livestock products.
The main difference between the two is that small farms often produce little other products besides their main source of income. Sometimes this is even a full monoculture operation. If other agricultural practices are happening on the farm, they are in the form of a small garden or a child’s project for the local fair. Where a commercial homestead or farmstead, you are going to see more of the sustainability in action. This means that the operation is feeding the family (often through a permaculture style system) while simultaneously making a profit.
Commercial Farm
Commercial farms are large operations that are generally monoculture or linear in nature. Meaning they grow only one crop or grow one crop to support another, like corn for dairy cows. Many of these farms are still family owned, and sadly many have at least one household member that works off the farm to provide medical insurance or steady income during off season for the farm. These farms are more likely to receive government subsidies (should they qualify), have large loans for equipment, and use chemicals and synthetic fertilizers, which is the model that has been set over the last 50-75 years. Many of these farmers struggle to make ends meet as they are in a tough cycle (though now all of them). Many of these farmers will dabble in small amounts of homesteading to meet their personal food needs.
There are also corporately owned farms that are run by managers, not owners. In some cases, the owners are not even a single person, but an entity. These farms have a lot of expendable income, but are more reluctant to make some of the changes people are calling for out of fear of reducing their bottom line.
What kind of farm do you have?
If you are ready to start yours and do not know where to start, check out my homestead business page for ideas and guides!