Peasant farm: concept, essence, features of creation and activity

Any person has the right to engage in personal subsidiary or peasant farming to create agricultural products. It is intended for own consumption or sale. There are significant differences between peasant farms and private household plots, and before starting work, the intended purpose of the land plot is taken into account.

The concept and nuances of peasant farming

The peasant farm is represented by a peasant farm. This type of activity consists of agricultural entrepreneurship. The process is carried out by people who are relatives. All co-owners of the plot have equal rights in relation to the territory, and also bear equal responsibility for violation of the requirements of the Land Code.

Common property refers only to a plot of land. If there is any property on the territory, represented by equipment, equipment or buildings, then the rules for its use are given in a special agreement drawn up between the co-owners of the land. This document is certified by a notary.

If one person wants to leave the farm, he receives material compensation, and the amount depends on the size of the share in the plot. It is allowed to replace a monetary amount with material assets represented by products, equipment or equipment, but only with the permission of the participant himself.

Inventory

Accounting in agricultural companies is complicated by the constant circulation of assets, recalculation of production costs, and natural loss of property. To obtain up-to-date information about the condition of assets, an inventory is carried out. The list of property being inspected and the frequency of inspections are determined by the farmer, taking into account the nature of the activity.

Usually the status is checked:

• property assets as part of fixed/current assets;
• livestock in the main herd and young animals;
• grain crops, seeds for sowing;
• reporting on transactions with counterparties;
• other assets of the company.

The inventory is carried out by a special commission, which is approved by the management of the organization. The data obtained during the verification process is noted in the inventory list.

Differences between peasant farms and private household plots

These types of farms have some differences:

• peasant farming is intended to make a profit, and private household plots are used to obtain products for own consumption, and not for resale, although it is allowed to sell surpluses;
• for subsidiary farming, preliminary registration as an entrepreneur is not required, and when choosing a peasant farm, the owners or tenants of the land must register an individual entrepreneur;
• Personal income tax or other types of tax are not paid on income received from private household plots, and for peasant farms, fees are paid based on the chosen taxation system.

Each form has both pros and cons, so before choosing a suitable farming option, its features are taken into account.

Insurance payments

Insurance contributions are paid from salaries to pension and extra-budgetary funds. The percentage of deductions is determined by the selected fee payment mode. Reporting is submitted to the Federal Tax Service. Deductions for cases of injuries and occupational diseases are sent to the Social Insurance Fund in the form of an abbreviated report.

Let's consider the types of reporting and place of submission:

• the final report is submitted to the Social Insurance Fund;
• data on deductions for injuries and occupational illnesses are provided to the Social Insurance Fund;
• the RSV-1 calculation is submitted to the Pension Fund;
• a report type SZV-M is submitted to the pension fund every month.

Today, all reports are accepted by the tax service quarterly.

What plots of land are allowed for running private household plots or peasant farms?

Only plots that have the appropriate purpose can be used for growing agricultural products. The following actions are performed on them:

• cultivation of crops necessary for consumption or processing;
• grazing.

It is allowed to use not only purchased land, but also territories issued by the local administration or leased from the owner. Not only the lessor, but also his family members have the right to use the plots. But it is not allowed to involve outsiders in this activity who receive a salary for their work.

To conduct activities, any plots with the appropriate category are used, so they can be located in the city or outside its borders. The soil must be black soil, therefore it is prohibited to build buildings with foundations or residential buildings in such an area.

Plots allocated for agriculture cannot exceed 0.5 hectares in size, but there are exceptions, so some families can use an area of ​​up to 2.5 hectares.

For private household plots or peasant farms, plots with developed infrastructure are used, so water supply, electricity and road surfaces are supplied to them.

FAQ

1. What status will a farmer have after state registration?

A company operating in the agricultural sector can be registered as an individual entrepreneur or a legal entity. The status is assigned immediately after state registration of the business.

1. Is it possible for a farming organization to use a simplified accounting system?

Yes, a company can use a minimum amount of registers when maintaining tax and accounting records.

1. Do I need to take into account funds from cash transactions?

The farm undertakes to comply with legal regulations. If there are cash transactions, then these transactions need to be documented.

1. If at the end of the reporting period there is a loss, is a fine imposed under the Unified Agricultural Tax?

The profitability or unprofitability of an enterprise does not affect the taxpayer’s obligations to make advance and principal payments to the Federal Tax Service. If the money is not received, a fine (penalty) will be imposed.

Pros and cons of farms

Private household plots and peasant farms have significant advantages, although they have some disadvantages. The positive aspects of subsidiary farming include:

• ease of starting a business;
• state registration is not required;
• infrastructure is improved at the expense of the state;
• grown products can be sold, bringing high profits;
• no need to pay taxes;
• receiving government benefits;
• Part of the land is allowed to be rented.

But this type of activity has the following disadvantages:

• collective responsibility, therefore, if one family member violates the requirements of the law or causes damage to the land through his actions, then penalties are applied to all co-owners;
• to obtain a harvest you have to spend a lot of time and effort;
• restrictions on the size of the plot used for farming;
• lack of opportunity to hire workers;
• establishing certain limits on the quantity of products received.

When choosing a peasant farm, there are the following advantages:

• providing a grace period of up to 5 years, during which the entrepreneur is exempt from paying taxes;
• banks offer preferential conditions when applying for a loan;
• lack of regular and complex inspections by Federal Tax Service inspectors;
• the ability to choose simplified taxation systems that do not require accounting;
• accrual of length of service for all participants in the farm;
• provision of benefits and concessions from the state;
• a decision regarding the use of an existing allotment can be applied without first holding a meeting of owners.

The disadvantages of growing agricultural products through peasant farms include:

• there is no opportunity to hire additional workers who are not related to the participants;
• it is impossible to build a capital facility on the territory intended for storing inventory, equipment or collected products;
• a person can be a member of only one peasant farm;
• Significant costs are required to register a farm;
• the land can be used exclusively for its intended purpose;
• the infrastructure is formed at its own expense, and this is a mandatory process if the plot is used for agricultural activities, otherwise the owner will be held administratively liable by paying a large fine.

Since each option has its own pros and cons, it is recommended to choose the optimal type of farming before starting work. To do this, it takes into account whether the products will be grown for consumption or profit.

Cows

Farming as a business idea for beginners: government assistance

In order to develop agriculture, there are various government programs to support entrepreneurs. Of greatest interest is government support for farming, according to which any farm that operates for up to 24 months can receive a grant of up to 1.5 million rubles.

Criteria for receiving financial assistance:

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  Over the past 3 years, the applicant has not been engaged in any business activity.

• He lives or has moved for permanent residence to the territory where the peasant farm is located.
• Farming is the only source of income.
• The applicant provided a business plan.
• The account contains at least 1/10 of the required grant amount, and the funds will subsequently be used exclusively for the development of peasant farms.
• The applicant will provide a plan according to which the funds will be spent.
• The peasant farm must use the grant in full within 12 months from the date of receipt.
• KHF is committed to farming for a minimum of 5 years.

For what purposes does the state issue a grant? This could be the purchase of land, the construction of a warehouse, access roads, roads, construction work, the purchase of animals, equipment.

Which farm is better

It is impossible to answer this question, since the choice of private household plots or peasant farms depends on the purpose of the activity. If people want to do business, making a profit from sowing and harvesting, then they choose peasant farms. They will not have to register a large company, since it is enough to register an individual entrepreneur and choose the optimal taxation system.

If people plan to use the resulting products themselves, selling only a small amount of surplus, then private household plots are chosen. Citizens will not have to pay taxes even on income received from the sale of grown products. They do not need to prepare special reports submitted to the Federal Tax Service. But they will face some restrictions regarding plot size and will also not be able to obtain product certificates.

The disadvantages of private household plots include the difficulty of obtaining a loan from a banking institution. This is due to the fact that subsidiary farming cannot be developed to a large scale. Therefore, if you plan to work from scratch, you will have to use only your own and not borrowed funds.

When choosing a specific type of farm, the purpose of the activity is taken into account. If you plan to receive a permanent and only income, then a peasant farm is chosen.

Specific primary

Accounting in a farm involves processing primary documents, reflecting financial and economic transactions in the database, maintaining registers, making entries, generating and submitting reports. It’s worth looking at the primary in more detail.

The use of a number of documents is due to the peculiarities of farming activities. Thus, a peasant farm accountant has to deal with waybills F412 of the agro-industrial complex, registers for sending grain from the field, accumulative statements of harvest receipts, records of the movement of raw materials, acts for sorting, drying, etc. Limit-fence cards, acts of write-off of materials, acts of posting of offspring (relevant for livestock farming) are also accepted for accounting.

A peasant farm accountant must have the appropriate competencies and experience in accounting for an agricultural producer. Otherwise, serious mistakes and associated tax, financial, legal and reputational consequences cannot be avoided.

Features of taxation for subsidiary farming

Based on Art. 217 of the Tax Code and the provisions of Federal Law No. 112, owners of private household plots may not pay personal income tax or other types of taxes. But for this the conditions must be met:

• the area of ​​land owned by a citizen on the basis of property rights does not exceed 0.5 hectares;
• work on the land is carried out only with one’s own hands or with the involvement of relatives, but other specialists are not hired;
• Most of the products received are used for personal consumption rather than sale.

Owners of private household plots are required to pay land tax, although they have the right to apply for a benefit.

What to do

In fact, you can do anything on your property that is not expressly prohibited by law. You can grow crops on it, from cucumbers to wheat, you can raise geese or ducks, pigs or cows on it. Of course, you will not be allowed to grow poppy or hemp, since this falls under the Criminal Code of the Russian Federation. The number of animals is limited by sanitary standards, but even if the number of animals is slightly exceeded, no one will punish you.

Poultry brings good income and does not require serious investments

One of the good options for private household plots is breeding ducks, geese or chickens. There is no need to build special outbuildings for them; it is enough to simply fence off certain areas with a net and create places for them to spend the night. The principle of building a business is simple: in the spring you buy young animals, raise them, and in the fall you sell the surplus at markets, fairs or by selling them to stores/retail chains. This option is good because you can quickly make your first profit and recoup all your expenses. If you choose the right site, your costs will be minimal. For example, if there is a river or pond nearby, then geese and ducks will feed almost on their own . Of course, they need to be given grain or feed to quickly gain weight, but at the same time they will live virtually independently with minimal care.

Please note that you do not have to sell poultry (or other products) fresh. You can easily process it by freezing the meat or making semi-finished products. But for this you will need to obtain a veterinary certificate confirming the quality of the product, as well as various veterinary reports.

Is it possible to organize a farm on the territory for private plots?

Under some conditions this is allowed, but you will first have to contact the local administration to obtain permission. Another significant condition is the location of the land outside the city.

The translation process begins with the preparation of a package of documents. It includes an extract from the Unified State Register of Real Estate confirming ownership of the land plot, an application in the form of the local administration, a passport of the owner of the territory, as well as documents confirming that the applicant is the founder or participant of the peasant farm. The documentation is transferred to the city municipality, after which it is necessary to wait for a decision.

A positive decision is made only if there are compelling reasons set out in the application.

conclusions

Now you know everything about private household plots - what it is, how it is registered, what taxes it pays and what it does. Let's talk about the prospects of such an undertaking. If we consider the period from 2015 to 2021, it becomes clear that of almost all sectors of the economy, only the agricultural sector developed: its growth was almost 7% annually, while in other areas there was either a decline or an increase of 1–3%. . This suggests that agriculture has potential in Russia. Products grown on our own land are always popular. People are happy to buy local cucumbers, tomatoes, beets, potatoes and other crops, rather than imported ones from Egypt and Israel, because they are tastier, more environmentally friendly and more natural.

At the same time, you need to understand that not all crops bring the same profit and it is not a fact that you will get it with minimal investment. Any business requires a competent approach. If you plan to sell vegetables, you will need a greenhouse. If you want to grow food under clear skies, then you need to organize high-quality watering and protection from insects/pests. When raising poultry or animals, you need to understand the process to prevent mass pestilence.

Marketing plan

When advertising your products, focus on their naturalness, environmental friendliness, and health benefits. Choose original packaging for cottage cheese, butter, cheese or feta cheese.

If you are engaged in cattle breeding, rabbit farming or poultry farming, obtain an official sanitary or veterinary certificate for your goods. This is the best advertisement for private household plots.

This way you will distinguish yourself from unscrupulous competitors who sell meat of unknown origin or violate sanitary standards in the milk production process, and will also gain the trust of customers.

Use different ways to attract customers: from advertisements in local newspapers, signs on the gate of your house, stickers on your car, to advertising on the Internet.

Surely you have accounts on social networks. Post there photos of the products you have produced, some stages of their production, ask your friends to leave feedback about your work.

Post ads on online classifieds platforms. At the time of writing there are 2079 advertisements for the sale of homemade milk on Avito. Most of them are without photos or with a picture from the Internet instead of real photos.

Take a photo of a jug of milk, your cow in the meadow, or other types of dairy products you sell. This will interest the buyer and help beat the competition.

How justified is it to invest in such a business?

I'll give an example of my friends. They have a small mini-farm of 8 heads of cattle (cows), 4 adult pigs and 7 piglets, 30 chickens, 15 rabbits, as well as purebred German shepherds for sale of puppies. There are 5 people in the family. 2 adults, 3 children (25, 22 and 10 years old). The head of the family is a livestock specialist by training.

Adults and children are involved in the work. The main income is the sale of dairy products: cheeses, feta cheese, cottage cheese, sour cream, butter. They also sell eggs, fresh pork, and rabbit. Place of sale: a trading place in the city market, rented jointly with other “mini-farmers”.

If the volume of dairy products produced by their farm decreases, they buy additional milk from local residents. This mini-business gives the family a stable income and allows them to live in abundance. Its profitability is obvious.

To confirm my opinion, another story about a mini-business in the countryside:

Opening a business based on your own personal plot is a great idea for entrepreneurs who do not have much initial capital and want to organize a business from scratch.

This is a chance to try your hand at the agricultural industry and decide for sure whether it’s for me or not. In 2021, the import substitution program continues to operate, thanks to which the agricultural industry opens up new opportunities for aspiring businessmen and investors.

Risk factors

In any business there are many risk factors that threaten the stability of income and sometimes the existence of the enterprise itself.

Risks of doing business on private household plots and ways to eliminate them: