FARM SIZE AND SUSTAINABILITY:
HOW DOES FARM SIZE RELATE TO
PEOPLE, PROFIT AND PLANET?
Paul D. Mitchell
AAE 320
http://www.nytimes.com/2014/08/10/opinion/sunday/dont-let-your-children-grow-up-to-be-farmers.html
Sustainability and Agrarianism
• Small farms: celebrated over the centuries: Agrarianism
• Hesiod’s Works and Days, Vergil’s Georgics, …
• Chinese Agriculturalism: Peasant utopian communalism
•
•
•
•
•
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and egalitarianism [F.H. King]
French Physiocrats, Jeffersonian democracy
Small is beautiful, Back to the land, Closer to nature, …
Food Movement is just the current manifestation
Is current focus on Ag Sustainability the academic,
scientific, business manifestation of this ?
Three Pillars of Sustainability: People, Profit and Planet
Let’s look at the data on how farm size connects to
farm income and environmental performance
Overview
• Farm size trends based on USDA data
• Relation between farm size and farm income based on
USDA data
• Evaluate accuracy of “Don’t Let your Children Grow Up
to be Farmers”
• Relation between farm size and use of BMPs: Prokopy et
al. (2008) meta-analysis
USDA Data on Farm Size
• http://www.ers.usda.gov/topics/farm-economy/farm-household-well-
being/farm-household-income-(historical).aspx
• http://www.ers.usda.gov/data-products/farm-household-income-andcharacteristics/data-files/table03xls.aspx
• Classifies farm size based on annual sales revenue
• Categories I use here ($1,000)
• < $50, $50 to $250, $250 to $500, > $500
• Simple rule of thumb I use to connect annual sales to
actual income is to assume a profit margin of ~20%
• Revenue of $250,000 means income of about $50,000
• Thus the $50 to $250 roughly means $10,000 to $50,000
in annual farm income
Total Number of Farms in the US from
1996 to 2012
2,250,000
Total Number of Farms
2,200,000
2,150,000
2,100,000
2,050,000
2,000,000
1,950,000
1994
1996
1998
2000
2002
2004
2006
2008
2010
Lots of variability, with net increase of ~160,000
2012
Number of Farms in the US
from 1996 to 2012 by Size Category
1,800,000
170 bu/ac x
$4/bu x 75 ac
= $51,000
1,600,000
Number fo Farms
1,400,000
1,200,000
1,000,000
800,000
600,000
< 50
400,000
50 to 250
250 to 500
200,000
> 500
0
1996
1999
2002
2005
2008
2011
Lots of small farms with < $50,000 in annual revenue
Number of Farms with < $50,000 in
Revenue in the US from 1996 to 2012
1,750,000
1,700,000
1,650,000
1,600,000
1,550,000
1,500,000
1,450,000
1996
1999
2002
2005
2008
2011
Number of Small Farms has Increased since 1996
Number of Farms with $50,000 to $250,000 in
Revenue in the US from 1996 to 2012
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
170 bu/ac x $4/bu x 375 ac = $255,000
1996
1999
2002
2005
2008
2011
Ag in the Middle is Disappearing!
Number of Farms with > $250,000 in Revenue
in the US from 1996 to 2012
160,000
Number of Farms
140,000
120,000
100,000
80,000
250 to 500
60,000
> 500
40,000
20,000
0
1996
1999
2002
2005
2008
2011
Number of Large Farms is Increasing
USDA Farm Income Data
• Rural Residence:
< $250,000 and not
farm as occupation
• Intermediate:
< $250,000 and
farm as occupation
(Small Farmers)
• Commercial:
> $250,000
$52,440
• Small farms make their money as non-farmers
• Commercial farms have done well recently
How much is $52,440?
• Assume a family of four: Ma, Pa and two kids
• US poverty threshold in 2012: $23,492
• https://www.census.gov/hhes/www/poverty/data/threshld/
• Eligible for SNAP (food stamps) and free school lunches if
less than 130% of poverty level = $30,540
• Eligible for Reduced Cost school lunches if less than
185% of poverty = $43,460
• Main point: many kids from small farms will qualify for free
or reduced school lunches and/or food stamps
• For comparison: minimum wage $7.25/hr x 40 hrs/wk x 52
weeks = $15,080 x 2 adults = $30,160/year
Same result even if you look at “successful”
small farms
• Half of Small
Farms made
money as
farmers
• Of those Small
Farms making
money, only
about 1/3 of
their household
income is from
farming
Median Farm Income by Type
• In 2012, most
grain/crop farmers
and dairy farmers
made money
• Livestock and
fruit/vegetable
farmers did not
Where do farmers get this off-farm income?
• 60% from other jobs
held by the farmer
or spouse
• 14% from other
businesses the
farmer runs
Lifestyle/Quality of Life Indicators
• More dairy, hog and fruit/veg farm households than
average lack health insurance
• Small farm operators do about 2/3 of the farm work while
commercial farm operators do about 1/4 of the farm work
US Net Farm Income (Cash)
150
US NFI ($B)
120
90
60
30
0
1990
1994
1998
2002
2006
2010
2014
• Four years of record farm income, with 2012 the highest
ever seen, but small farmers have not been part of this
Quick Summary
• Small farms ($50,000 to $250,000 revenue) disappearing
• 20% decrease from 1996 to 2012
• Commercial farms increasing in number
• 54% increase in farms > $250,000 from 1996 to 2011
• Most commercial scale farms have made very good
incomes the last several years, but not most small farms
• Many of these small farm households likely are on the
edge of poverty (1st world version), lacking health
insurance at above average rates
• My Point: Based on these data, I’m not convinced
“small farms” are economically sustainable
• Don’t let your children grow up to be farmers is right
What about Environmental Sustainability?
• Prokopy et al. (2008) Meta-analysis
• L.S. Prokopy, K. Floress, D. Klotthor-Weinkauf, and A.
Baumgart-Getz. 2008. Determinants of agricultural best
management practice adoption: Evidence from the
literature. J. Soil Water Conserv. Soc. 63(5):300-311
• Let’s use adoption of BMPs as a measure of
environmental sustainability
• Table 2 variables:
• Acres: larger farms have more acres
• Income: larger farms have more income
• Labor: larger farms have access to more labor
Prokopy et al. (2008) Meta-analysis
• Table 3 results: impact of variable on BMP adoption
• Acres: 37 positive, 16 negative
• Income: 33 positive, 14 negative
• Labor: 24 positive, 5 negative
• Table 5 results: Which types of BMPs have more positive
than negative impacts?
• Acres: soil management, nutrient management, other
• Income: soil management, livestock management, other
• Labor: soil management, nutrient management, other
Prokopy et al. (2008) Meta-analysis
Prokopy et al. (2008) Meta-analysis
Environmental Sustainability & Farm Size
• Farm size has a (weakly) positive impact on farm BMP
adoption, especially soil and nutrient management
• My Point: Based on these data, I’m not convinced
“small farms” are environmentally more sustainable
• Could use these results to argue the opposite
• Comments/Notes
• Social/community aspects of sustainability (network)
positively correlated with higher BMP adoption
• Diversity also positively correlated with higher BMP
adoption
Don’t Let your Children Grow up to be Famers
• The dirty secret of the food movement is that the much-
celebrated small-scale farmer isn’t making a living.
• The food movement is missing, ironically, the perspective of
the people doing the actual work of growing food.
• Policy Proposals: What do you think?
1. Loan forgiveness for college grads who pursue agriculture
2. Programs to turn farmers from tenants into landowners
3. Guaranteed affordable health care
4. Shifting subsidies from factory farms to family farms
5. Building our own production hubs & distribution systems
6. Support workers up and down the supply chain