Protecting Diversified, Direct-Market, and Value-Added Operations with Smart Business Structures, Written Agreements, and Regulatory Compliance

Project Overview

Project Type: Research and Education
Funds awarded in 2013: $158,660.00
Projected End Date: 12/31/2015
Region: North Central
State: Wisconsin
Project Coordinator:
Rachel Armstrong
Farm Commons

Annual Reports


Not commodity specific


  • Crop Production: food product quality/safety
  • Education and Training: decision support system, farmer to farmer, focus group, workshop, technical assistance
  • Farm Business Management: whole farm planning, community-supported agriculture, cooperatives, marketing management, farm-to-institution, risk management, value added, agritourism
  • Sustainable Communities: local and regional food systems, partnerships

    Proposal abstract:

    This research and outreach project will increase the stability and resilience of diversified farms through asset protection strategies and assistance with sales contract design and implementation. Our project team will accomplish this in three steps. A survey and several focus groups inform subsequent legal research into the unique legal situation of diversified Midwest farms. After developing research guides and sample documents, we disseminate our research product to farmer and attorney communities. Third, and most importantly, we assist farmers and attorneys in implementing these strategies to solidify the economic sustainability of diversified farms in the North Central region.

    Specifically, this project will produce a guide to choosing and maintaining a smart business entity from beginning diversified farmers to the complex multi-farm strategies emerging within CSA, value-added, and distribution farm businesses. We will produce a second guide to sales contracts and negotiating important terms with an emphasis on grocery, institutional, community supported agriculture, and school sales. These resources will be permanently accessible to thousands of farmers and agriculture attorneys on the internet. Subsequent interactive workshops in four states will result in collaboratively drafted but individual documents that farmers understand and can immediately implement. We provide each workshop attendee with attorney access through our network, which will facilitate protection of hundreds of thousands of dollars in personal assets currently unprotected under sole proprietorships. We will also guide farmers as they implement sales agreements, which will give farmers recourse over millions of dollars in product sales. By educating a network of attorneys in serving the complex needs of these unique farm businesses, we create a long-term strategy for fostering a permanent, stable base of sustainable farmers.

    Project objectives from proposal:

    Three hundred sustainable farmers nationwide will benefit from attending our online webinar because they will understand how their choice of business entity affects their liability, how to decide on an entity, how to convert or start up a limited liability company or corporation, how to draft the accompanying operating agreement and bylaws, and how to negotiate and draft a sales agreement. At least 3000 farmers nationwide will also benefit from access to our legal resources that clearly explain the law as relates to a diversity of sustainable farming businesses. 240 sustainable farmers in Wisconsin, Illinois, Iowa, and Minnesota will benefit from attending our 8 regional workshops in each of the four states. At these workshops, farmers will collaborate with other farmers in a discussion format. As a result, farmers will feel more resolved in their decision. Attending farmers will also walk away with actual documents that are drafted and assembled during the workshop, and we will individually support the conversion of at least 10 farm business entities resulting in the protection of hundreds of thousands of dollars in personal assets. All attending farmers will have access to an attorney for follow up questions, and we anticipate individual follow up with at least 30 farmers in implementing written documentation. Our impact will extend beyond those that attend the workshop or read our materials. Because they fully understand the decision-making process and document assembly, the farmers we reach will be able to better explain to others how they arrived at their decision and assist other farmers in making wise choices for themselves. Lastly, we will integrate at least four other attorneys within the attorney network program to improve their knowledge and skills in serving diversified and direct-to-consumer farmers. This impact will extend far beyond the term of this project as these attorneys continue to serve farmers in their local area and contribute learned experience back to all attorneys as the network grows.

    Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.