Perhaps you live on an acreage and have land to spare. Maybe you grew up farming and although you don’t farm full time, are feeling nostalgic. Or you could be one of the many Canadians who enjoy raising crops or livestock as a hobby. Whatever your motivation for running a hobby farm, there are risks and liabilities that need to be insured against to ensure that your hobby doesn’t bankrupt you. Below is information on soil health, grazing tips, tax reporting and hobby farm coverages.
Soil Tips for Hobby Farms Investment Planning that Grow Cash Crops
According to this Small Farm Canada article, these are some of the steps you can take to “supercharge your soil health”:
1. Consider No-till farming. This leaves the ecosystem below the soil’s top level intact to naturally grow and thrive, preserving the soil structure and vital fungal networks that grow there.
2. Cover your soil. Using cover crops protects your soil by reducing erosion and keeping valuable microorganisms from getting washed away.
3. Keep live roots in the ground – even in winter. The fungal networks that provide nutrients and help protect soil from droughts need live roots in the soil to continue to function so leaving live roots in the ground during winter can help them be ready for the next planting season faster.
3. Diversify your crops. “Using complex crop rotations and multispecies crop covers helps attract a wider variety of beneficial organisms — below the soil as well as above. That biodiversity translates to better pest management, improved soil structure and greater resilience.”
4. Use soil amendments whenever possible. Soil amendments such as manure, compost and line feed beneficial soil organisms, help draw in carbon from the atmosphere, boost organic matter and help the soil build resistance to changes in climate.
Tips for Hobby Farms Raising Livestock to Maintain Even Grazing
An issue for Hobby farms in pollution liability of all sizes is uneven grazing that can leave certain hobby farm fields untouched and others completely barren. Small Farm Canada makes the following recommendations:
1. Divide pastures by using fencing, rotating watering schedules and forcing your stock to graze on available pastures.
2. Limit grazing time per paddock helps gras stay healthy.
3. Give the grass sufficient rest. Pastures can take anywhere from 25 – 60 to recover depending on climate, weather and region.
4. Be flexible by moving stock through paddocks faster in spring, harvesting hay or silage and using surplus forages.
5. Be patient even if grass goes to seed or paddocks are overgrazed. Following best practices can take months or years for results to show.
Hobby Farms and Taxes
Farm tax specialists FBC Canada has the following advice on tax reporting for hobby farms:
A farm is considered to be a part-time operation if there is a reasonable expectation of profit but, the operator’s main source of income does not come from farming.
Like a full-time farmer, a part-time farmer’s personal insurance can claim deductions for home office expenses and farming business expenses. But unlike full-time farmers, part-time farmers can only deduct a portion of these expenses.
They can only claim a portion of any Hobby farms losses as well. As a part-time farmer, the maximum amount you can claim in any one year is $17,500. These losses can be carried back 3 years or forward 20 years and can only be deducted against farming income.”
Hobby Farm Insurance Tailored to your Coverage Needs
Even if you’re not profiting from your hobby farming, you still need to protect yourself from liability and losses. These are just some of the insurance coverages that can be included in your customizable hobby farm insurance package:
- Hobby Farm General Liability Insurance, Product Liability Insurance & Farmers Market Insurance
- Hobby Farm Machinery Insurance covering tractors, field cultivators, etc.
- Hobby Farm Equipment Insurance for plows, spreaders, etc.
- Hobby Farm Vehicle Insurance
- Hobby Farm Outbuilding Insurance for barns, silos, grain buildings, etc.
- Loss of Hobby Farming Income Insurance
- Livestock Insurance for Hobby Farms
- Cash Crop Insurance for Hobby Farms
For more in-depth information and for all of the insurance coverages that are available for your hobby farm, visit our Canadian Farm Insurance Coverage Overview page.
ALIGNED, Brokering Hobby Farm Insurance That Suits Your Needs
As commercial insurance specialists who work with Canada’s top insurers, we can secure the right amount of coverage that protects your hobby farm, giving you only the coverage you need at affordable rates. Contact an ALIGNED advocate or use our online tool to get a free quote in minutes.
Different types of Insurance in Hobby Farm
- Business Insurance
- Fleet Insurance
- Recreational Insurance
- Property Insurance
- Hole in one Insurance
- Facility Insurance
- Mutual Insurance
- Cottage Insurance
- Garage Insurance
- Beef Farm Insurance
- Instructor Insurance
- Crop Farm Insurance
- Hospitality Insurance
- Dairy Farm Insurance
- Event Insurance
- Tenants Insurance
- Personal Insurance
- Boat Insurance
- Trailer Insurance
- Disability Insurance
- Equestrian Insurance
- Poultry farm Insurance
- Classic Car Insurance
- Critical Illness Insurance
- Manufacturing Insurance
- Risk Insurance
- Snowmobile Insurance
- Insurance Package
Different Types Of Farm In Hobby Farm
- Horse Farm
- Hog Farm
- Dairy Farm
- Commercial Farms
- Crop Farm
- Beef Farm
- Poultry Farm
- Public Liability Insurance
- Micro Cultivation Insurance in Canada
- Office Insurance in Canada
- Builders Risk Insurance
What is a hobby farm?
A hobby farm is a small farming operation run basically for fun and not to make money. That means the intention of a hobby farmer is to farm for pleasure and that hobby farmers, while they may sell a few crops or animals, have a primary source of income that doesn’t come from farming activities and that hobby farmers aren’t actively and regularly going to market to sell their crops or livestock or trying to make a profit from their hobby farms.
Hobby farms can often be confused with part-time farms or homestead farms that attempt to at least make enough money for the farming operations to be self-sustaining. While hobby farming may generate some income, hobby farming is done by Canadians who, like many other hobbyists, are willing to spend money on their hobbies without a financial return.
What does hobby farm insurance cover?
Hobby farm insurance isn’t a single insurance policy but rather a package of liability insurance policies that are designed to protect a hobby farmer from the financial risks and legal liabilities that come with farming – even if it’s done as a hobby.
What that means is that there are different policies that cover different aspects of running a hobby farm and that a brokerage that specializes in commercial insurance like ALIGNED can put together a hobby farm insurance package that addresses your specific risks and do so by finding you the best rates and bundling discounts to protect your hobby farming operations.
Having said that, hobby farm insurance packages can be customized to cover things like:
- Legal liability protection (including lawyer’s fees, out-of-court settlements and awards for damages) as well as medical expense coverage and property damage costs for personal injuries (not your own or any employees) and property damage caused by your hobby farming products or operations.
- Structures/dwellings/buildings on your hobby farm and the contents inside them.
- Income protection and replacements costs
- Livestock, eggs, dairy and crop losses
- Farming equipment, tools and vehicles
How much does insuring a hobby farm cost?
How much hobby farm insurance costs depends on a number of factors including things like:
- Value and construction of your home and other buildings on the property
- The type of hobby farming you do
- The machinery and equipment used in your hobby farming
- And safety measures you’ve taken
- Location of your hobby farm and distance from emergency services like the local fire department
- Insurance history including number of years insured and number of claims filed
The above list is not exhaustive and other factors will influence how much it will cost to insure your hobby farm.
Is hobby farm insurance a requirement?
There is no legal requirement to carry hobby farm insurance, but being insured is the prudent thing to do as hobby farm insurance can protect you from losses that your homeowner’s policy likely won’t cover as well as protection from legal liability and loss of income, crops and livestock.