Individual Agricultural Entrepreneur: Definition and Requirements

Individual Agricultural Entrepreneur

An individual agricultural entrepreneur is a natural or legal person who holds ownership that allows them to pursue agricultural economic activity and assumes the risks and responsibilities thereof.

The LMEA (Law of Modernization of Agricultural Holdings) defines the owner of the farm, i.e., the agricultural employer, as the "natural or legal person holding the farming property and rights to organize members of the farm business with specific criteria, assuming the risks and responsibilities arising from the management of the holding, be it civil, social, or fiscal."

Requirements of an Agricultural Entrepreneur

• The existence of a farm organization is required. The constitution of this organization should be carried out by the employer or acquired from another for any reason.
• The organization must be entrepreneurial. This means that there must be a market-oriented economic organization, not just for the consumption of agricultural products.
• Assumption of risk and liability is essential. There are financial risks associated with the activity, but also civil, fiscal, social, and, where appropriate, criminal liabilities.
• Professionalism is required. This consists of the usual, permanent, or systematic practice of farming. The LMEA measures this in terms of income and time spent on the farm.

Definition of a Professional Farmer

The definition of a professional farmer (Article 9 LAR - Law of Agrarian Reform) states: "A professional farmer, for the purposes of this Act, is one who obtains annual gross income from farming greater than twice the income indicator of multiple effects established by Royal Decree-Law 3/2004 of June 25 for the nationalization of the regulation and to increase the amount of the minimum wage. This is based on a direct and personal commitment to these activities, involving at least 25% of their working time." This indicator is known by the acronym IPREM (Public Income Indicator of Multiple Effects). It is set annually by the Law on the State Budget, in consultation with business organizations and trade unions, taking into account the forecast or inflation target.

Personal Farming

Personal farming is also considered a form of professional agriculture. This figure has antecedents in previous tenant law. In this model, the direct and effective occupation of the farm, either alone or with family help, is highlighted. Common characteristics include dedication to farming on farms that are not administered in their name. It is also possible that the grower has older staff, whether retired or a pensioner, without demanding exclusivity. The most characteristic feature is the performance of farm work alone or with family members living with them, without using additional employees except in certain circumstances.

Personally Farming (ATP)

An ATP (Agricultor a Título Principal) is a professional farmer who obtains at least 50% of their total income from farming on the holding. Their working time devoted to agricultural activities not related to the holding is less than half of their total working time.

The fundamental difference from a significant professional farmer is as follows: for ATP, time spent on follow-up work is not counted. ATP has less practical relevance for the purposes of receiving aid or subsidies. This figure of ATP allows their presence to be seen as a priority holding for the exploitation of associations where two-thirds of the surface is under one edge, with the concurrence of other requirements.