I think this John Phipps article pasted below sums it up nicely.  He's talking about what constitutes a "real" farmer, but as shown in the replies on this thread, apparently the qualifications for a real and/or family farm are the same.

© 2002 John Phipps
The Forbidden Joys of Unreal Farming

Farmers are not spontaneously outspoken people, as a rule. It takes an issue of significance to move them to argue publicly or with a stranger. Luckily I am stranger than most. As a result, I hear from producers via phone and e-mail on a variety of firmly held positions.

One theme that recurs in these communications is the idea of “real” farmers. Like art, most of us can’t describe one, but we know one when we see one. Interestingly, I have noticed that most of those who have precise definitions have unique definitions. Even with guidance of celebrities like Willie Nelson, there is little agreement on the basic requirements.

The first issue is income source. Real farmers, it seems, make their money from farming. They should be able to check the “2/3 box” on their IRS 1040. Or maybe not. At the least, the majority of their income should come from farming. Not counting the wife, of course. And trucking and spraying and custom harvesting are OK too. But that’s only as a last resort.

The result is that some level of “outside” income can disqualify you as a Real Farmer. The exact level is unclear, but my current estimate is that income greater than 38% of Schedule F income pushes you into unreal farming. However, income from passive investments (interest, inheritances, etc.) is perfectly permissible.

More interesting to me is the use of the term “outside”. I think it hearkens back to a world view that extended only to the farm gate – a stand-alone community separate from the rest of the economy. This concept was more plausible about 100 years ago when farmers didn’t rely on vast support industries to create products. At any rate, it is becoming increasingly difficult to define what is “outside” the farm, when production agriculture is better described as part of an industrial network.

Also quietly ignored is the role of the Real Farmer Spouse. Presumably, his or her role can evolve to make the preservation of the Real Farmer possible. Real Spouses are free to work and employ their time in any manner they choose without approbation. Apparently sleeping with the enemy is not a problem. Perversely, spouses like mine, who work solely on the farm, are now so rare as to constitute another disqualifying factor.

Similarly, the issue of labor is another problem. Real Farmers only use their own and family labor. For the most part. Not counting custom spraying and manure spreading …or any of the growing number of specialists who serve agriculture.

Personally, I’ve always felt that Real Farmers should do their own taxes. In my opinion you can’t really understand ag tax laws if you don’t experience the actual calculations. Real Farmers should fix their own feederhouse chains, as well, rather than phoning the dealer.

Much of the “labor qualification”, then boils down to work we like or don’t. Real farmers drive tractors and may or may not buy options, for example. Likewise, many feel that real farmers should have livestock.

Real farmers buy land. A major (competing) farm publication here in Illinois honors “Master Farmers” with a prestigious award. Having read dozens of winner biographies it is clear that one unwritten requirement is significant acreage ownership. So even if you rent 5000 acres, you’re still a little unreal.

On the whole, many “real” rules seem based on two things: farm life as we knew it when we were farm children, and an image we think the subsidy-paying public will warm to.

The result is that the number of Real Farmers is plummeting because of both attrition and disqualification. It also seems that Real is in the eye of the beholder and usually the beholder is looking in a mirror.

The categorization of unreal farmers gives many of us a way to decrease (in our minds) the level of competition we face. Unreal farmers don’t count, because they are playing a different game. Unfortunately, while this may aid when comparing our competitiveness with carefully selected peers, it doesn’t mean squat in practice. Unreal farmers are replacing real every day.

It could be that freedom from frames of reference like “real” is one of the tools needed to survive in our industry. Our professional job description is written by thousands of producers responding to thousands of life situations. It is not brief or concise.

Regardless, at the individual level, a strange sense of freedom can emerge as you embrace your personal “unrealness”. Once I realized I was not mainstream, many of the rules changed. I could say and do as I thought best, and justify my conduct blithely, “Of course, I’m not a Real Farmer.”

What a relief!