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Financial Opportunities for Acreage Owners
Mindy Hubertmindy.hubert@sdstate.edu
Income Opportunities
• Ag Status (tax savings)• Grants• Other programs
Benefit of “Ag Status”• Can help lower property taxes,
sometimes very significantly
– Depends on your county tax levy – Example:
$14 tax/$1000 assessed for ag landvs.
$16 tax /1000 assessed value for non-ag
Benefit of “Ag Status”• More significantly, depends on
how your property is assessed:– Non-ag (owner-occupied) vs. ag
property
Benefit of “Ag Status”• Non-ag property is assessed at
market value
• Ag property is assessed based on a productivity formula– Almost always significantly less than
Market Value• most notable on properties valued
high (Black Hills)
ExamplePropertyDescription
Assessment Tax
Wall or Black Hills,100ac
ag land @ $200/ac $200*100ac=$20,000*.014 (levy rate)=$280
Wall, 100ac non-ag @ $1000/ac
$1000*100ac=$100,000 *.016 (levy rate) =$1600
Black Hills, 100ac non-ag @ $5000/ac
$5000*100ac=$500,000 *.016 (levy rate) =$8000
Qualifying for Ag Status
• SDCL 10-6-31.3• Two of three following criteria
must be met:1. (State Requirement) Minimum of
20 acres owned• Counties can require up to
160 total acres
Minimum Acreage SizeCounty Minimum Size
(ac)
Butte 145
Lawrence 41
Pennington 40
Meade 73
Custer 40
Fall River 160
Harding 160
Jackson 70
Criteria-continued2. 33.3% of total family gross income is ag3. Acreage is devoted to:
• Raising crops, timber or fruit trees
• Rearing, feeding, and management of farm livestock, poultry, fish, or nursery stock
• Production of bees and apiary products, or horticulture
• Horses generally not considered Ag (thought of as a tool to conduct ranch work)…like a ranch truck or border collie
Criteria• Hobby Ag vs. Production Ag:
o Principal use of the property is ag production with “Intent to produce income”
o A 40 acre property with a home, garage, and 20 sheep does not meet this criteria.
o A 40 acre property with a home, garage, and 200 head feedlot does.
Directors of Equalization: http://www.sdcounties.org/
Shannon Rittberger, Penningtonshannonr@co.pennington.sd.us 505 Kansas City StreetRapid City, SD 57701(605) 394-2175
Kirk Chaffee, Meade doe@meadecounty.org1300 Sherman St., Suite 222 Sturgis, SD 57785(605) 347-3818
Allison Jensen, Custerajensen@custercountysd.com420 Mt Rushmore RdCuster, SD 57730 (605) 673-8170
Polly Odle, Butte polly@buttesd.org839 5th Ave.Belle Fourche, SD 57717(605) 892-3950
Directors of Equalization Terri Halls, Fall Riverfrdoe@gwtc.net906 N. River St.Hot Springs, SD 57747(605) 745-5136
Tim Hodson, Lawrencethodson@lawrence.sd.us 90 Sherman StreetDeadwood, SD 57732(605)-578-3680
Kyle Helseth, Minnehahaequalization@minnehahacounty.org415 N. Dakota Ave.Sioux Falls, SD 57104(605) 367-4228
Directors of Equalization: http://www.sdcounties.org/
May Help Qualify for Ag Status (Pennington, Fall River, Custer)
• Tree Farm System http://www.treefarmsystem.org• 105 certified American Tree Farms in SD• Must have an approved Management Plan for property Inspections every 5 years• Can help prove Principal Use of acreage is Timber
• John Hinners, John.Hinners@state.sd.us South Dakota Department of AgricultureP.O. Box 940Huron, SD 57350-0940
Grant Opportunities for Acreage Owners
• Ag-related grants generally fund:o Sustainability projects (water, land, etc.)o Income-based operationso Demonstrations/feasibility studieso Outreach/Education projectso Marketing Strategies
Federal Grants
• Primary source of most grants
• Very competitive
• Specific goals or priorities you need to address
Federal Grants: USDA SARE
o SARE “Sustainable Agriculture Research &
Education”
o http://www.northcentralsare.org/GRANTS
o Four Programs:
o Research & Education
o Professional Development
o Youth/Educator
o Farmer/Rancher Grants
Federal Grants: USDA Rural Develop.
• Value-Added Producer Grants (VAPG)
• http://www.rurdev.usda.gov/rbs/coops/vadg.htm
o Eligible: independent producers, farmer/rancher
cooperatives & producer groups & businesses
o Funds:o Planning grant ($100,000)o Working capital ($300,000)
o Belle Fourche: Jackson Winery and Vineyards, LLC $300,000
o Rapid City: Wild Idea Buffalo Company $17,500
Federal Grants: USDA Rural Develop.
• Rural Energy for America Program (REAP) • http://www.rurdev.usda.gov/BCP_Reap.html
o Financial assistance to agriculture producers & rural small businesses for purchasing, installing and constructing renewable energy systems (windmills, etc.)
o An agricultural producer is directly engaged in the production of agricultural products whereby 50 percent or greater of their gross income is derived from the operations.
Federal Grants: USDA Rural Development • Rural Energy for America Program (REAP)
o Grants available up to 25% of total project cost up to $500,000
o Loan Guarantees up to 75% total project cost of
$2500-$25M
Natural Resource Conservation Service (NRCS)
• Various conservation programs offered
• Signup is continuous for many programs
• Limited resource farmers/ranchers, beginning farmers/ranchers, socially disadvantaged producers, and Tribes may be eligible for a higher payment rates
• No acreage limits for most programs; preference given to largest impact producers
Natural Resource Conservation Service (NRCS)
• 2011: 3,700 conservation plans implemented in SD; positively affecting 1.6 million acres (430 acres on average)
State Grants• Dept. of Ag: http://
www.sdda.sd.gov/AgPolicy/Grants o Specialty Crop Block Grant (SCBG)
o Purpose: solely enhance the competitiveness of specialty crops (fruits, vegetables, tree nuts, dried fruits, horticulture, and nursery crops [including floriculture]).“
o Due April 2nd 2012o Range of awards $2100-$35,000
Private Industry Grant Links
• https://attra.ncat.org/calendar/funding.php• http://www.beginningfarmers.org/• http://aggrantguru.blogspot.com/• http://ofrf.org/
Producer Participation Opportunities:• Spring Creek Watershed Partnership
o For landowners in the Upper Spring Creek Watershed (above Sheridan Lake)
o Cost share opportunity to improve water resourceso http://www.springcreekblackhills.com
• Belle Fourche River Watershed Partnershipo funding available to convert flood irrigation to center
pivots and to convert open ditches to pipelines in flood irrigation systems.
o http://www.bellefourchewatershed.org/o Contact local NRCS office for more info
Links from this Training• www.sdstate.edu/wrac/sdsa– Real estate tab• ACRE exam• Upcoming Continuing Education events• Presentations posted from training
• www.iGrow.org– ACRE designees listed– Extension Field Staff– Livestock & Small acreage tabs
Links from this Training• SDSU Regional Extension Center– 605-394-1722
• Denise Miller, GIS SpecialistNRCS - Rapid City FSO605.343.1643 ext. 134
• denise.miller@sd.usda.gov
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