Illinois Cattleman Testifies Before Congress; Calls for Updated Business Size Standards for Agriculture
(November 19, 2015) – Illinois cattle producer Jeff Beasley testified before the House Committee on Small Business, Subcommittee on Agriculture, Energy, and Trade regarding the outdated small business size standards for agriculture. Beasley, co-owner of Beasley & Sons Livestock from Creal Springs, Ill., said the size standards haven’t kept up with the evolving industry, and hurt small family operations like his own.
“The outdated size standards of the Small Business Act clearly do not reflect the needs of modern agriculture,” said Beasley, who manages between 2,000 and 4,000 head of cattle depending on the year. “Many farm operations, like mine, are still family owned and operated, but the cost of doing business has increased tremendously; as has the average age of the farmer.”
The Small Business Act of 1953 authorized the Small Business Administration to establish the standards for determining the financial eligibility assistance of small businesses. The definition of a small business is subjective and it varies by industry. Under the Small Business Act, a small business is determined by number of employees, dollar volume of business, net worth, net income, a combination thereof, or other factors. The definition is meant to be relative to each industry and reflect the differing characteristics between industries.
“Living and working on a cattle farm is a wonderful way of life, and it’s a great place to raise a family. You must have a strong desire, passion and a good work ethic to accept this challenge of raising livestock. I've never had anyone tell me they got into agriculture to get rich, but rather because they loved doing this work. However, we in agriculture can't live solely on dreams. Farming and ranching is the quintessential ‘small business.’ We should be recognized as such and we need to be treated as such, in regard to business regulations that can so greatly affect us.”
In 1984, the Small Business Administration proposed changing the definition of ‘small’ to farms with cash receipts less than $100,000. Congress responded in 1985 by removing SBA’s ability to establish a small business size standard for agriculture by enacting a statutory level of $500,000 that was later increased to $750,000 by Congress in 2000. The authority to update the standards has not been transferred back to the Administrator of the Small Business Administration.
The Small Agriculture Producer Size and Standards Improvement Act (H.R. 3714) was introduced by Rep. Mike Bost (R-Ill.) in October. The bill amends the Small Business Act to return the authority for establishing size standards for agriculture to the Small Business Administration, the same process as other small businesses. Beasley said he strongly supports this bill.
“An average farmer in 1987 would have been eligible for a loan through the Small Business Administration by not exceeding the statutory limit of $500,000,” explained Beasley. “However, an average farm value in 2012 would vastly exceed the statutory limit of $750,000 established in 2012. The Small Business Administration should have the authority to adjust statutory limits on a regular basis using data such as the Census of Agriculture that is conducted every five years, as well as other data provided by the U.S. Department of Commerce.”
NCBA and its members believe that despite the increasing regulatory and tax burdens and the frivolous abuse of the legal system, America continues to be a fertile ground for the entrepreneurial spirt and multi-generational, family-owned businesses. Enacting the Small Agriculture Producer Size and Standards Improvement Act is a step in the right direction to recognize the important role of small agricultural businesses in America’s economy.