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 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 Current focus on Ag Sustainability is the latest manifestation of this in academics, science, & business 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 https://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx http://www.ers.usda.gov/topics/farm-economy/farm-household-well-being/ 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 Lots of variability, with net increase of ~160,000

Number of Farms in the US from 1996 to 2012 by Size Category 170 bu/ac x $4/bu x 75 ac = $51,000 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 Number of Small Farms has Increased since 1996

Ag in the Middle is Disappearing! Number of Farms with $50,000 to $250,000 in Revenue in the US from 1996 to 2012 170 bu/ac x $4/bu x 375 ac = $255,000 Ag in the Middle is Disappearing!

Number of Farms with > $250,000 in Revenue in the US from 1996 to 2012 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) 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 as sole income source, must economically diversify 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

Prokopy et al. (2008) Meta-analysis

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

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? Loan forgiveness for college grads who pursue agriculture Programs to turn farmers from tenants into landowners Guaranteed affordable health care Shifting subsidies from factory farms to family farms Building your own production hubs & distribution systems Support workers up and down the supply chain