Financial Opportunities for
Acreage Owners
Mindy Hubert
mindy.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 land
vs.
$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)
Example
Property
Description
Assessment
Tax
Wall or Black
Hills,
100ac
Wall, 100ac
ag land @ $200/ac $200*100ac=$20,000*.014
(levy rate)
=$280
non-ag @
$1000*100ac=$100,000
$1000/ac
*.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 Size
County
Minimum Size
(ac)
Butte
145
Lawrence
41
Pennington
40
Meade
73
Custer
40
Fall River
160
Harding
160
Jackson
70
Criteria-continued
2. 33.3% of total family gross income is ag
3. 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, Pennington
shannonr@co.pennington.sd.us
505 Kansas City Street
Rapid City, SD 57701
(605) 394-2175
Allison Jensen, Custer
ajensen@custercountysd.com
420 Mt Rushmore Rd
Custer, SD 57730
(605) 673-8170
Kirk Chaffee, Meade
doe@meadecounty.org
1300 Sherman St., Suite 222
Sturgis, SD 57785
(605) 347-3818
Polly Odle, Butte
polly@buttesd.org
839 5th Ave.
Belle Fourche, SD 57717
(605) 892-3950
Directors of Equalization:
Directors of Equalization
http://www.sdcounties.org/
Terri Halls, Fall River
frdoe@gwtc.net
906 N. River St.
Hot Springs, SD 57747
(605) 745-5136
Tim Hodson, Lawrence
thodson@lawrence.sd.us
90 Sherman Street
Deadwood, SD 57732
(605)-578-3680
Kyle Helseth, Minnehaha
equalization@minnehahacounty.
org
415 N. Dakota Ave.
Sioux Falls, SD 57104
(605) 367-4228
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 Agriculture
P.O. Box 940
Huron, SD 57350-0940
Grant Opportunities for Acreage
Owners
• Ag-related grants generally fund:
o
o
o
o
o
Sustainability projects (water, land, etc.)
Income-based operations
Demonstrations/feasibility studies
Outreach/Education projects
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 2012
o 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 resources
o http://www.springcreekblackhills.com
• Belle Fourche River Watershed Partnership
o 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 Specialist
NRCS - Rapid City FSO
605.343.1643 ext. 134
• denise.miller@sd.usda.gov