Before you buy a farm, it's important to define what farming is.
Agriculture encompasses a variety of plant and animal production activities. It is important to refer to the legislation that defines it, in particular the Code Rural.
Article L311-1 of the French Rural Code provides an initial definition of agricultural activity. According to this article :
"Farming is the control and exploitation of a biological cycle, whether plant or animal.
This definition emphasises the civil nature of agricultural activity, distinguishing it from industrial, commercial or liberal activities. In other words, agricultural activity focuses on the management and exploitation of natural biological processes.
It should be noted that this definition of a farm makes no mention of a threshold in terms of surface area or area farmed, or of the status of the farm (sole proprietorship or company).
Article L722-1 of the French Rural Code supplements this definition by listing the activities that enable the people concerned to benefit from the social protection scheme for non-salaried workers in the agricultural professions, i.e. membership of the Mutualité Sociale Agricole (MSA). The main activities included in this definition are
Livestock farming: Traditional or specialised livestock farming, as well as fish farming and professional sea fishing on foot (with the exception of seamen, who have a special regime), are an integral part of agricultural activity.
Equestrian activities: Horse-related activities, such as breeding, dressage, training and stud farms, are considered agricultural. However, the simple activity of boarding horses does not fall under this status.
Forestry: The management and exploitation of forests are also included in agricultural activity, underlining the importance of sustainability and the management of natural resources.
Processing and sales activities: Activities that extend the act of agricultural production, such as the processing and packaging of farm products, as well as their direct sale, are recognised as agricultural. This includes, for example, making jam, cheese or wine from farm produce.
Tourism activities: Tourism activities carried out on the farm, such as farm inns, farm campsites or furnished rentals, are also considered agricultural. They enable farmers to diversify their sources of income, while at the same time enhancing the value of their rural heritage.
Agricultural work companies: Companies that carry out agricultural work on behalf of other farmers are also included in this definition.
Methanisation, which consists of producing biogas, electricity or heat from organic matter, is considered to be an agricultural activity when 50% of the output comes from material produced on farms. This activity illustrates innovation and diversification in the agricultural sector, contributing to the energy transition.
The tax definition of agricultural activity in France is essential for determining the tax regime applicable to income generated by agricultural holdings. Unlike the civil definition, which focuses on the nature of the activities, the tax definition focuses on how the income is classified and taxed.
In France, income from farming is generally classified as agricultural profits (BA) under the General Tax Code (CGI). This includes income from plant and animal production, as well as from related activities such as methanisation, provided that the majority of production comes from the farm.
It is important to note that some activities, although carried out on a farm or as an extension of the farm, may be subject to different tax regimes. For example, farm tourism activities or forestry work for third parties may be taxed as industrial and commercial profits (BIC), especially if they are not directly linked to agricultural production.
In summary, farming in France is defined by a wide range of activities centred on the management of biological cycles and the production of natural resources. It includes not only traditional crop and livestock farming activities, but also complementary activities such as product processing, rural tourism and innovative initiatives such as methanisation. A person engaged in agricultural activity is designated as a farmer and operates a farm, thereby contributing to the economic and social vitality of French rural areas.
