A bill to amend section 502(c) of the Rural Development Act to assist small farmers in upgrading their farming operations.

Provides that the small farm extension, research and development programs established pursuant to the Rural Development Act shall be conducted by the Federal-State Cooperative Extension Services. States that the duties of the Extension Services shall be expanded to include a study to identify small farmers in each State and to determine their resources, abilities, education and willingness to upgrade their farm operation through improved farm management practices (presently the research is limited to new approaches for small farms in management, agricultural production, techniques, new products, and marketing).

Requires the Secretary of Agriculture and the Federal-State Cooperative Extension Services to implement a program to improve operations of small farmers, to establish procedures for evaluating the social and economic consequences of such program, and to submit an annual report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture and Forestry of the Senate regarding the extent to which the objectives of the program provided for in this subsection are being achieved.

Defines "small farmer" as any person who depends on farming as his primary source of income, whose gross annual sales from farming operations are less than $20,000, and whose income from nonfarm sources is less than $5,000.