LRF/R Tool Background and Data Sources
Background
The Limited Resource Farmer and Rancher Online Self Determination Tool is an online tool developed by USDA to help producers determine if they qualify as a Limited Resource Farmer, Rancher or Forest Owner. It provides the county values necessary to qualify for Limited Resource Farmer status. The purpose of this tool is to ensure that limited resource farmers are provided access to USDA technical assistance programs and activities according to Section 622, Agricultural Credit Act of 1987, Public Law No. 100-233, 101 Stat. 1985. This section kept unchanged with the 2008, 2014, and 2018 Farm Bills.
The Limited Resource Farmer and Rancher Online Self Determination Tool was developed in 2003 and is updated annually.
Program Sponsor
The program sponsor for the Limited Resource Farmer & Rancher Tool is Edwin Almodovar, Director, NRCS Office of Outreach and Advocacy, 202-720-6646. Mark Peters, Economist, FPAC Business Center, 301-504-1564, is responsible for the annual data updates.
Limited Resource Definition
The Limited Resource Farmer and Rancher definition was developed by USDA staff in 2002. USDA maintains the current definition for the 2002, 2008, 2014, and 2018 Farm Bills.
Each year, values are updated for: the gross farm sales limit, national poverty level, and 50 percent of the median household income for the previous two years. Data sources and calculations are discussed below.
Gross Farm Sales Limitation Update Method
The Gross Farm Sales value is updated annually and is indexed using the prices paid index that is updated annually by NASS. This value is baselined at a 2002 value of $100,000 and then indexed using the Prices Paid by Farmer Index as compiled by NASS to adjust for inflation.
- Changed to Prices Paid Index (PPI) 2011-baseline = 1.00. October, 2002 baseline = $61,300
- The PPI in July 2024 is 139.2.
- Gross Farm Sales Limitation = One hundred thousand dollars X (PPI2023/PPI2002) = $100,000 * (139.2/61.3) = $227,100.
The prices paid index is updated by NASS on the last business day of each month, so data is updated each year using July values.
National Poverty Level Limitation
The National Poverty Level is defined as the Health and Human Services (HHS) Poverty Guidelines. These are issued every January by HHS using Census Poverty Data. The historical data is available here. The basis for the Poverty Threshold used by Health and Human Services to determine its Poverty Guidelines is the dollar cost of a selected food plan that meets basic nutritional needs, not including eating out, multiplied by three[1].
Since this data is issued annually, we use the most recent data to update the Self Determination Tool. The Poverty Guidelines used in the most recent update to the tool is shown in the table below.
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| 2024 | 15,060 | 5,380 | 31,200 | 39,000 | 35,880 |
The remaining data items are updated using the most recent data released as possible. For example, given availability of data, the 2024 poverty guidelines should be used with the 2024 2nd quarter income data; the 2023 poverty guidelines should be used with the 2023 2nd quarter income data; the 2022 Poverty guidelines with 2022 2nd quarter income data; the 2021 poverty guidelines with 2021 2nd quarter income data, and the 2020 poverty guidelines with 2020 2nd quarter income data.
County Median Household Income
In 2005 The U.S. Census Bureau, with support from other Federal agencies, created the Small Area Income and Poverty Estimates (SAIPE) program to provide more current estimates of selected income and poverty statistics than those from the most recent decennial census. The SAIPE database provides annual estimated state, county, and school district income data and is updated each January. We use the most recent county-level median income estimates from SAIPE in our calculations. There is a lag in the release of the SAIPE data, so the most recent data available when we do our data updates is from 2 years prior. This year, we are using SAIPE data from 2022. This data is then indexed using data from http://bea.gov/ as described below.
Since the farmers using the tool are comparing this with their previous two income tax returns, using fourth quarter estimates are comparable. So, we index the two-year-old county median household income up to match the previous year’s income tax return. All calculations are done in nominal terms.
(Figures not adjusted to reflect later revisions by BEA. Also, dollars are reported on the ‘current’ price base of the annual update. Last Revised on: August 29, 2024. You can see the adjustments from previous year’s data, but we are only indexing up 1.5 years.)
| 2018 2nd Quarter |
53,354 |
1.5063 |
1.0591 |
| 2018 Final |
55,091 |
1.5553 |
1.0729 |
| 2019 2nd Quarter |
56,514 |
1.5952 |
1.0802 |
| 2019 Final |
56,991 |
1.6090 |
1.0682 |
| 2020 2nd Quarter |
61,842 |
1.7459 |
1.1225 |
| 2020 Final |
61,682 |
1.7414 |
1.0917 |
| 2021 2nd Quarter |
62,090 |
1.7529 |
1.1110 |
| 2021 Final |
62,255 |
1.7529 |
1.0067 |
| 2022 2nd Quarter |
64,908 |
1.8325 |
1.0526 |
| 2022 Final |
66,534 |
1.8784 |
1.0716 |
| 2023 2nd Quarter |
67,911 |
1.9173 |
1.0909 |
| 2023 Final |
69,205 |
1.9538 |
1.0662 |
| 2024 2nd Quarter |
70,919 |
2.0022 |
1.0659 |
For FY2025, we adjusted the 2022 County Median Household Income by 1.0659 to get to 2024 2nd Quarter incomes to match with the 2024 poverty levels.
Calculations
The County/Area value updated annually in the database is the higher of the National Poverty Level or 50% of the County/Area Median Household Income, adjusted as described above.
[1]https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines/mollie-orshansky-her-career-achievements-publications; https://www.ssa.gov/history/fisheronpoverty.html
Data updates provided by Mark Peters.
Page updated: 10/01/2024
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