Operating a farm business involves more than just growing crops or raising animals. Before beginning your farm operation, you want to be sure you can legally operate your farm in your town and that you have the protections you need to mitigate risks to yourself, your business and those who interact with your farm.
You cannot just start a farm anywhere
The Right to Farm statute in New Hampshire says if you are a farmer and you have been a farmer for more than a year, you can use this statute as a defense for nuisance lawsuits in court. Municipalities can have their own definition of agriculture, so make sure you are seeking out this information with your town.
Check zoning ordinances and how your town defines terminology for agriculture
Municipalities may not be familiar with agriculture, and it is up to the farmer to be proactive and ensure there are no zoning ordinances that may be in direct conflict with what you are trying to do.
Never assume your homeowner’s insurance policy protects you
Call you insurance agent before you start your farm, and disclose what you plan to do. A homeowner’s policy may not protect you, and your markets may require you to have a minimum level of insurance coverage.
Be aware of restrictions on your property
Conservation easements are a common restriction on property. Find out if your property has a conservation easement on it and find out what the restrictions are and how flexible it is. Access ways for yourself or someone else on the property, such as a driveway or a utility right-of-way, are permanent restrictions that comes with the land. When you do a title search, you will discover any restrictions on your property. Insurance for rights-of-way are also necessary for protection for all parties involved.
Know local taxation for agricultural structures
Greenhouses with permanent foundations are subject to property taxation, while season extension structures such as high tunnels with no permanent foundation are not. If you start using other structures on your property in a business capacity, be sure to call your insurance agent, as that potentially changes coverage to your existing insurance policy.
Understand agri-tourism definitions
There is a state definition of agri-tourism, and you need to have a working farm to meet that definition. Research land use regulations and be prepared to develop a site plan review for the town. Insurance requirements change dramatically when it comes to events. Disclosure and communication with your insurance carrier is key. Be cautious and estimate out what all of your expenses will be, including insurance.
Protect all parties involved in a rent/lease situation
Always have a written lease agreement for any property, including equipment, that you are renting or leasing. Borrowing equipment or other property is very risky in these situations for both property owner and the tenant. The tenant will need to have their own insurance as the farmer, and the landlord should request to be additionally insured on the tenant’s policy. Both parties should work with an attorney to ensure their own interests are protected and stated properly in the lease agreement.
Know that people on the farm impact your liability
There are fine lines between an employee and a volunteer. Determine whether you have an employee or a volunteer, and ensure you have proper insurance coverage, if applicable. A subcontractor provides services to you and should have their own insurance. Always request a certificate of insurance, and ask to be listed as additional insured.
A special thanks to Ted Fodero of the Meredith Insurance Agency, Amy Manzelli of BCM Environmental & Land Law and Theresa Walker of Durham Agricultural Commission and Rockingham Planning Commission, for their time and expertise.
The Legal Guide for New Hampshire Agricultural Producers covers these laws and other important legal requirements.