Fergus Leased Seven Goats and Entered into an Agreement with a Management

Fergus leased seven goats and entered into an agreement with a management company to agist, breed from, and otherwise care for and manage the goats. The taxpayer intended, on his retirement, to buy a farm and raise goats for meat and milk purposes, so the seven goats were leased with the aim of building his herd. The taxpayer took a keen interest in the development of the herd, received monthly reports from the management company as to their progress and maintained a card index system for his leased goats and their offspring. Is Fergus carrying on a business?

A) Yes, although the size and scale of his activities is small, the activities are being conducted on a commercial basis
B) Yes, but only when he actually starts selling the goats or their milk
C) No, as the size and scale of these activities is so small that is in the nature of a hobby and not a business
D) No, since there has not been any income derived as yet