Farm, Hobby Farm, Homestead, Farmstead, What's the Difference?
I was scrolling through one of my Facebook homesteading groups the other day and I saw a post from a girl who said something along the lines of “not sure if I’m in the right place, or if I can even call myself a homesteader” and it brought up the question; farm, hobby farm, homestead, farmstead, what's the difference?
And, it got me thinking am I homesteading?? Can I call myself a homesteader? So I decided to look into it and see if I could clear up the confusion for some of you as well as for myself. As I dove into the topic, I realized there are a lot of similarities and a few distinctions between the terms. So if you’re in the midst of asking if homesteading is right for you, and finding it difficult to determine what homesteading is, this article is for you.
What Is A Farm?
Core Principals - The production of agricultural products
This is obviously a term that people are the most familiar with. It tends to evoke either images of big red barns and farm animals or wide-open acres of crops. The United States Department of Agriculture classifies a farm as “any operation that can produce at least $1,000 in agricultural products a year.” Note that it says “produces” not necessarily sell those products. By that basic definition, nearly any homestead, farmstead, and hobby farm could fall under this category. However, many traditional farmers might scoff at hobby farmers or homesteaders who call their enterprises “farms.” So, let’s differentiate between the types a bit more.
A farm (also called an agricultural holding) is any area of land devoted to agricultural processes with the primary objective of producing food and other crops for sale as a business and primary source of income.
Basically, a farm is meant for growing crops and rearing animals. It could be a:
You get the picture. Some farms are specialized, producing only one product, while others are more diverse in their offerings.
What is a Hobby Farm
Core Principals - Entertainment, recreation, relaxation
This is perhaps one of the hardest of the terms to wrap your head around because by using the word farm you’d be inclined (at this point) to jump to “oh it has income” but you’d be wrong. A hobby farm is literally what it sounds like, a hobby. Just like reading, kayaking, quilting, or any other hobby, the purpose of a hobby farm is relaxation and/or entertainment. True, hobby farmers raise goats, chickens, alpacas, and everything else, but for the most part, these animals are more like pets and not raised for the purpose of feeding the family. Hobby farmers are not driven to become self-sufficient (though they won’t scoff at fresh eggs or milk) more, they live the farm “lifestyle” for the joy of doing it.
Oftentimes hobby farmers have outside 40-hour-per-week jobs that pay for their “lifestyle.” The average hobby farmer is not invested in breaking even, much less making a profit. The only thing they are looking to accomplish is making themselves happy. And more power to them I say!
What is a Homestead
Core Principals - Self-sufficency/self-reliance
Here’s the big differentiator for homesteading, homesteaders have a singular goal, self-sufficiency. Like a farm or hobby farm they tend to raise animals and grow crops, but these activities are done with the specific intent of providing for their families. Homesteaders tend to get lumped in with preppers because they share a lot of the same traits, but unlike preppers who may have “bug-out locations,” a homesteader lives a life of self-reliance every day and actively works their land to provide the resources their family needs to survive.
They tend to be avid DIYers and are typically trained in “old fashion” skills like canning, food preservation, sewing, animal husbandry, and carpentry. Their primary goal isn’t to sell and gain profit from their goods, but to live off the land and provide for as many of their needs as possible by themselves. Some people mistakenly refer to this as a hobby farm, which suggests that it's a nice little thing they do just for fun. Nothing could be further from the truth: they do it to survive and to thrive, not as a hobby.
Core Principals - Farming as a home/homestead-based business
The term farmstead is exactly what it sounds like, a combination of a “farm” and a “homestead.” This means that along with the purpose of self-reliance, a farmsteader is also creating a business and generating an income from the crops they grow and the animals they raise.
In truth, many of today's homesteaders would be more accurately considered “farmsteaders.” The reason for that is because they are actively generating an income from a variety of things grown, raised, or made right on their homestead. If they were not selling anything, they’d be a homestead. But when they transition into selling even just the surplus, they’ve officially become a farm.
Let’s look at an example, If you own land and use it to grow food that you sell to a supermarket then you are without question running a farm. But, if you live on a property and grow just enough food to provide for your family, and sell the excess to neighbors, at a roadside stand, or a farmers market, you’re living on a homestead but running it like a farmstead because you are using your homestead to generate income. Make sense?
Does it Really Matter What I Call My Property?
In your basic casual conversation, no, not really. But there are a few areas where you need to carefully consider not just what you call your land but what you do with it.
When it comes to the IRS and how you file your taxes, yes it matters what your land is called. If you make a negligible amount of money (a few hundred dollars or less) from selling extra eggs, it won’t matter much. But, if you’re generating a true income from your property then you’d be wise to structure things and form a business entity separate from your homestead to protect your personal property.
*This statement is for informational purposes only, we are not tax professionals. Please consult an actual tax professional for any questions you may have.
For many people with acreage, this isn’t an issue, but if you live inside city limits or within an HOA acting outside of zoning regulations can get you fined. Always check if there are limits or restrictions on livestock. You could also run into issues concerning whether or not you are even allowed to make an income from your property. Be sure to check with your local zoning office before you make plans.
Your homeowner's policy may be structured to cover your home, your property, and maybe even your livestock and outbuildings. But they are meant for home and personal protection, not businesses. If you are truly just homesteading, you should be fine.
However, if you are working to turn your homestead into a farmstead, you could inadvertently invalidate your insurance policy by selling products off your farm. You may need to get a separate “farm owner’s policy” but depending on your situation, you might go so far as to set up an LLC for your farmstead/farm for an extra layer of protection.
*This statement is for informational purposes only, we are not insurance professionals. Please consult an attorney or an insurance professional for any questions you may have.
So, there you have it. The differences between a farm, hobby farm, homestead, and farmstead but, as you can see, the only place these names matter is when you get down to legalities. Another thing to note is that with the exception of “farm” nowhere does it say that you need acres and acres of land. You can feel free to homestead on an acre or even a ½ acre, and depending on your city ordinances you can have a hobby farm in a large backyard.
No matter what you call your property, the important part is that you strive to connect with the land you’re on. Take ownership of stewarding the land, plants, and animals in your care and consistently learn ways to do it better. Just remember to focus on quality over quantity, and on enjoying the life you’re choosing to live.
Are you more focused on self-reliance, lifestyle farming, or farming as a home-based business? Tell us all about it in the comments below and as always,