Figure 1. Farm-households allocate resources to farm and non-farm uses
and source inputs from multiple farm, household, and non-farm businesses
• increasing scale
• specialization family members
• risk management
• pluri-activity
• chain management by contracts
• asset management
• transaction costs shapes structure
• rural housing and hobby farming
• separation management and work
Supply
Labor
Capital (land)
Management
Farm Operators
&
Households
Influences
Allocation
decisions
Farm
Business
contracts
Agricultural
chain
Income
Increases in
Asset & Equity
Values
Earn
Factor markets
Influences:
Management structure
Decision making process
Claims on returns
Figure 2. Farm Organizational/Governance Structures May
Range from One to Many Owners and Operators
Farm Management Structure
Farm Ownership Structure
Principal operator
Principal operator’s spouse
Household: principal operator
Households: family members
Household: non-family members
Businesses and other entities
Principal operator’s household
members
Operators outside principal
operator’s household, e.g.,
partners, shareholders
Hired operators or managers
Informal participants or
other managers
Business Arrangements
Introduce Participants to
Decision Making Process
Joint ownership
and
other ventures
Contracts
Farm Organizational/
Governance Structure
-- Owners: from one to many
-- Managers/Operators: from
one to many
-- Contracts/business
arrangements may alter
decision processes
Organizational
structure affects
claims on returns
• Fixed return
or payment
• Physical output
claim
• Wages & dividends
• Net income
Figure 3. Distribution of farms by type of legal organization
and number of households sharing in net income of the farms
One household
Three households
Five or more households
Two households
Four households
100
90
80
70
60
50
40
30
20
10
0
Family or
individual
All
partnerships
Source: Agricultural Resource Management Survey, 2007
Partnerships
registered
under state
law
Corporation
Family held
corporations
Figure 4.Number of households per farm by operating
arrangement, Canada
Farms:one househld
Farms:two households
Farms:three househlds
120
100
80
60
40
20
0
Sole
proprietorship
Partnership with
written
agreement
Partnership
without written
agreement
Family
corporation
Figure 5. Distribution of farms by type of legal organization
and number of households sharing in net income of the farms
in the Netherlands
One household
Two households
Three households
Four households
100
90
80
70
60
50
40
30
20
10
0
sole
proprietor
Source: Dutch FADN, 2007
partnership
man/spouse
other
partnerships
limited
partnership
limited
company
Figure 6. Number of locations (farm addresses) per farm
business, the Netherlands, 2003 – 2007
120%
100%
80%
1 location
60%
2 or more locations
40%
20%
0%
farms 2003
farms 2005
Source: Dutch FADN, 2007
farms 2007
output 2003
output 2005
output 2007
Figure 7. Number of households sharing net income,
United States, 2007
One household
Two households
Three or more households
100
90
80
70
60
50
40
30
20
10
0
Sole
proprietorship
Legal
partnership
C-cororation
Source: Agricultural Resource Management Survey, 2007. C-corporation and Scorporation are specific legal forms of incorporation available to business owners in
the U.S. S-corporations are typically viewed as small business corporations
S-corporation
Figure 8. Farms by legal status and number of owners,
Italy, 2006
Single operator
Multiple operator
100%
80%
60%
40%
20%
0%
Sole ownership
Source: Italian FADN, 2006
Legal partnership
Corporation
Other
Figure 9. Distribution of farm business owners by number of
households associated with the farm, United States, 2007
One owner
Two owners
Three owners
Four or more owners
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
One
household
Source: Agricultural Resource Management Survey, 2007
Two
households
Three or
more
households
All farms
Figure 10.Share of farm owners that are part of the primary
operator’s household, United States, 2007
Owners: not a member of operator's household
Owners: member of operator's household
100
90
80
70
60
50
40
30
20
10
0
Sole
proprietorship
Legal
partnership
Source: Agricultural Resource Management Survey, 2007
C-corporation
S-corporation
All farms
Figure 11. Distribution of farm businesses by number of households
associated with the farm, The Netherlands, 2007
100%
90%
80%
70%
other
60%
2 households and 2 entrepreneurs
50%
1 household and >=3 entrepreneurs
1 household and 2 entrepreneur
40%
1 household and 1 entrepreneur
30%
20%
10%
0%
2003
Source: Dutch FADN, 2007
2005
2007
Figure 12. Farms exhibit a variety of persons engaged in
daily decision making, United States, 2007
Share of farms
Share of net income
Share of production value
70
60
50
40
30
20
10
0
One operator Two operators
Source: Agricultural Resource Management Survey, 2007
Three
operators
Four or more
operators
Figure 13. Farms with more entrepreneurs have the
majority of production, the Netherlands, 2007
Share of farms
Share of net income
Share of production value
50
45
40
35
30
25
20
15
10
5
0
One operator Two operators
Source: Dutch FADN, 2007
Three
operators
Four or more
operators
Figure 14. Distribution of commercial farms by number of
operators and legal status, Italy, 2006
Single operator
Multiple operator
100%
80%
60%
40%
20%
0%
Sole ownership
Source: Italian FADN, 2006
Legal partnership
Corporation
Other
Figure 15. Conceptual Constructs of Family and General
Business Organizational Structures
Panel A
Panel B
A typical corporation
Overlap of Family, Ownership, and
Management Groups
Owner
Owners
2
5
6
7
1
4
Managers &
Employees
Family
Members
Source: Tagiuri and Davis, 1996
3
Board of
directors
Management
/employees
1 = Just management/employees
2 = Just owner
3 = Just board of directors
4 = Management-board of directors
5 = Management-owners
6 = Owners-board of directors
7 = Management-owners-board of directors
Source: Neubauer & Lank, 1998
Figure 16. Farms include a range of owners and daily decision makers
in business governance-decision structures, United States, 2007
One operator
Three operators
Two operators
Four or more operators
100
90
80
70
60
50
40
30
20
10
0
One owner
Two owners
Source: Agricultural Resource Management Survey, 2007
Three
owners
four or more
owners
Figure 17. Number of households sharing net income of
farms by the number of operators on a farm, 2007
One household
More than one household
100
90
80
70
60
50
40
30
20
10
0
One operator
Source: 2007 U.S. Census of Agriculture
More than one operator
Figure 18. Share (%) of the types of farms by legal organization in
production, subsidies and total flow of funds (investment capacity)
the Netherlands, 2007
farms
production
subsidies
investment capacity
50
40
30
20
10
0
sole proprietor
Source: Dutch FADN, 2007
partnership
man/spouse
other
partnerships
limited
partnership
limited
company
Figure 19. Total family farm income, internal cash flow and total flow
of funds (investment capacity) in Euro per farm business by type of
legal organization, the Netherlands, 2007
Thousands
family farm income
internal cashflow
non farm income
total flow of funds
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
sole
proprietor
Source: Dutch FADN, 2007
partnership
other
limited
man/spouse partnerships partnership
limited
company