The History of the LRF/R Tool
History and Software Development Team
The Limited Resource Farmer and Rancher Online Self Determination Tool is an online tool deployed at the department level meant to help producers determine if they qualify as a Limited Resource Farmer, or Rancher or Forest Owner. It provides the county value necessary to qualify in 2 different formats, online or a hardcopy version. 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 and 2014 Farm Bills.
The Limited Resource Farmer and Rancher Online Self Determination Tool was jointly developed by the Social Sciences Institute, ITC, and Programs, and it was deployed on May 9, 2003. This tool was first published to the WEB largely due to the work of Beth Schuler, Adolfo Perez, Jeff Kenyon, David Buland, and Jill Schuler.
Jill Schuler provided the original IT guidance and development work on the Tool at the request of the current NRCS Programs Web Site Manager, Beth Schuler, and the NRCS National Limited Resource Farmer Program Leader, Adolfo Perez. She started her work from an EXCEL spread sheet that was originally going to be linked as a URL to the programs WEB page. Jill gathered the requirements for the application; modeled the database; developed the web site look and feel and programmed the application. Jeff Kenyon, NRCS, Social Science Institute, provided the original data analysis, David Buland provided the initial data.
Current Development Team
Currently, the USDA Limited Resource Farmer and Rancher Online Self Determination Tool is hosted, developed, and deployed by the NRCS Information Technology Center in Fort Collins, Colorado. Because this tool is a cooperative effort between many USDA agencies, it does not use the NRCS web template, but is based on a USDA template.
The program sponsor for the Limited Resource Farmer & Rancher Tool is Ronald Harris, Director, NRCS Office of Outreach and Advocacy, 703-235-8084. Technical responsibility of the calculations have been completed annually by David Buland, Economist, Central National Technical Center.
The Limited Resource Farmer & Rancher Tool was a coordinated effort between ERS, NASS, and NRCS to provide USDA/NRCS program applicants, specifically EQIP applicants, a tool to determine if they potentially qualify for the LRF/R 90% financial assistance. It was placed on the programs web site at the request of both the Chief and Deputy Chief for Programs because the primary use as previously stated, is for USDA program applicants having access to the tool. This tool is mandated by the farm bill.
Limited Resource Definition
The Limited Resource Farmer and Rancher definition was developed around Oct. 1, 2002, based on three months of analysis by ERS, NASS, FSA, and NRCS. Anne Dubey and David Buland contributed extensively to this debate. Jim Johnson, ERS, also provided extensive data analysis. USDA maintains this current definition for the 2008 Farm Bill.
Gross Farm Sales Limitation Update Method
Because of restrictions with EQIP rules the Gross Farm Sales limitation will be updated on October 1 annually. The baseline Prices Paid by Farmer Index value is 125, based on the October, 2002 Prices paid index. The Gross Farm Sales value will be 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 following this formula:
Prices Paid Index (PPI)
- The Prices Paid Index in September, 2008 PPI was 194. $100,000 * (194 / 125) = $155,200
- The Prices Paid Index in August, 2009 PPI was 177. $100,000 * (177 / 125) = $142,000
- The Prices Paid Index in September, 2010 PPI was 183. $100,000 * (183 / 125) = $146,400
- The Prices Paid index in June, 2011 is 204. $100,000 * (204 / 125) = $163,200.
- The Prices Paid index in June, 2012 is 216. $100,000 * (216 / 125) = $172,800.
- The Prices Paid index in September, 2013 is 221. $100,000 * (221 / 125) = $176,800. (Later adjusted down by NASS)
- The Prices Paid index in August, 2014 is 221. $100,000 * (221 / 125) = $176,800. The Prices Paid index (2011 baseline) in August, 2014 is 111.
- The Prices Paid index (2011 baseline) in July, 2015 is 109. $100,000 * (109 / 62.78) = $173,600.
The prices paid index is updated by NASS on the last business day of each month. The annual Health and Human Services (HHS) poverty rate and the median county household income data are updated each January.
The NASS Agricultural Prices Paid Index is based on a 1991-1993 bases of 100. Refer to the following web site link for more information on this index: http://www.nass.usda.gov/Charts_and_Maps/Agricultural_Prices/allprod.asp. In 2013, NASS moved the Agriculture Prices Indexes to a 2011 baseline. http://www.nass.usda.gov/Charts_and_Maps/graphics/data/all_prod.txt
A back calculation puts the October, 2002 PPPI as 62.78. The Prices Paid index (2011 baseline) in August, 2014 is 111. $100,000 * (111 / 62.78) = $176,800. 2015 and later calculations will use the 2011 baseline PPPI.
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.
Since this data is issued annually, we used the current data to update the Self Determination Tool. To match that, the other three data items should be indexed close to January values. Given availability of data, the 2008 Poverty guidelines should be used with 2007 income data; the 2007 poverty guidelines with 2006 income data, and the 2006 poverty guidelines with 2005 income data. Due to slight deflation, the 2010 Poverty Level was set at the 2009 Poverty level by Executive Order. The 2011 - 2014 Poverty Levels had the typical slight annual increases due to inflation.
County Median Household Income
When this tool was developed in 2003, the county median household income was calculated by an Income survey prior to each Census, in 1979, 1989, and 1999. The database was based on the 1999 county incomes, indexed by national per-capita income growth.
Recently, 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. The 2005 county median household income became available in January, 2008. Later, BEA was able to speed up reporting of the SAIPE data. The annual county data files are all named: est03ALL.xlsx through est13ALL.xlsx. The Median Household Income column is the one used for this analysis.
This tool indexes the 2005 median household income by per capita real GDP growth from fourth quarter 2005 to fourth quarter 2007. There is state per capita data available for 2006, but not for 2007. The 2006 state GDP growth was broadly spread between the states, with only Michigan having a slight (0.5%) decline in real growth, and all 50 states having nominal GDP growth. Total US Personal Income is available with a one-month delay. All calculations are done in nominal terms. http://bea.gov/
The 2005 Fourth Quarter Per Capita Personal Income is $35,449. The 2007 Fourth Quarter Per Capita Personal Income is $39,165 (released on 1/31/08). The 2008 Second Quarter Per Capita Personal Income is $39,977 (released on 8/28/08).
Table 7.1. Selected Per Capita Product and Income Series in Current and Chained Dollars (A) (Q) (Figures not adjusted to reflect later revisions by BEA)
|2009 2nd Quarter
|2010 2nd Quarter
|2011 1st Quarter
|2012 2nd Quarter
|2013 2nd Quarter
|2014 2nd Quarter
|2015 2nd Quarter
Since the farmers using the tool are comparing this with their final 2007 and 2008 income tax returns, using fourth quarter estimates are comparable. So we would index the 2007 county median household income up by 2% (rounded from 1.953%) to match the 2008 income tax return.
For FY2012, we indexed up the 2009 County Median Household Income by 1.0481 to get to 2011 1st Quarter incomes, to match with the 2011 poverty levels. This also helps smooth the effects of the 2008-2009 recession.
For FY2013, we indexed up the 2010 County Median Household Income by 1.0524 to get to 2012 2d Quarter incomes to match with the 2012 poverty levels.
For FY2014, we indexed up the 2011 County Median Household Income by 1.0689 to get to 2013 2d Quarter incomes to match with the 2013 poverty levels.
For FY2015, we indexed up the 2012 County Median Household Income by 1.0343 to get to 2014 2d Quarter incomes to match with the 2014 poverty levels.
For FY2016, we indexed up the 2013 County Median Household Income by 1.0101 to get to 2015 2d Quarter incomes to match with the 2015 poverty levels.
The Access database, LimitedResourceFarmerData11.mdb, has all needed data for the updates, and was reused for FY10 and later years. The 2008SeptLimitResLevels column in the 2008LimitedResourceFarmerData query provides the limits to be used in the tool through October 31, 2009. With this timing, farmers would be comparing their 2006 and 2007 income tax returns against this current limit.
For FY2010, the same 2005 – 2008 columns are retained for the FY2009 queries. A new query, FY2010LimitedResource FarmerData, created the FY10 LRF data, which was exported into the new table, LRFR_FY2010.
For FY2011 – FY2016, a new query, FY2011LimitedResource FarmerData, created the FY11 LRF data, which was exported into the new table, LRFR_FY2011. Since the database was moved to SQL Server, a spreadsheet of the table with the new FY2011 (through 2016) columns was developed for ITC.
For FY2016, a new query, FY2015LimitedResource FarmerData, created the FY16 LRF data, which was exported into the new table, LRFR_FY2016. Since the database was moved to SQL Server, a spreadsheet of the table with the new FY2016 columns was developed for ITC.
Kalawao Co. Hawaii has no Median Income, so we used the Hawaii state average of $56,133. Clifton Forge City, Virginia was missing Median Income, so we use the Virginia State Average. For FY2012 and later years, Kalawao and Clifton Forge also use the state averages.
The other Pacific Island, Virgin Islands, and Puerto Rico are not available. Given previous data, these will use the general US poverty level as their cutoff, which matches the current database.
Several Alaska areas were also given the Alaska state average in the database.
Data updates provided by David Buland.
Page updated: 09/24/2015