The Family Farm in a Flat World: Implications for Farm Household Data Collection Mary Ahearn, Krijn Poppe, Cristina Salvioni, Koen Boone, and Aide Roest Presentation at FAO, Wye-Rome Meeting, June 2009

Towards improvement in the Handbook Development of an integrated framework Development of an integrated framework Explicit recognition of changing structure and cross-country differences Explicit recognition of changing structure and cross-country differences Data implications of emerging issues Data implications of emerging issues

Integration Firms and households are basic economic units and basic focus of economic analysis Firms and households are basic economic units and basic focus of economic analysis A flat world means these units are able to adjust rapidly A flat world means these units are able to adjust rapidly Current frameworks are frameworks for ways to develop indicators, not frameworks for Current frameworks are frameworks for ways to develop indicators, not frameworks for how economic units behave andhow economic units behave and the implication of those behaviors for things societies care about: in our case rural development and agriculturethe implication of those behaviors for things societies care about: in our case rural development and agriculture

Go back a step Once an integrated framework which links agricultural and rural development to each other and the rest of the world… Once an integrated framework which links agricultural and rural development to each other and the rest of the world… Then the indicator frameworks can follow Then the indicator frameworks can follow The integrated framework, if appropriately general, will provide the basis of future indicator development The integrated framework, if appropriately general, will provide the basis of future indicator development

Turning to agriculture Is it unique? Is it unique? Why is it unique? Why is it unique? Differences in structure across countries are large and therefore require indicators that are disaggregated Differences in structure across countries are large and therefore require indicators that are disaggregated This was recognized in the HandbookThis was recognized in the Handbook But, was it recognized that the disaggregation should be based on a consistent structure? Why is that not possible?But, was it recognized that the disaggregation should be based on a consistent structure? Why is that not possible?

Some Recommendations Indicators of well-being should be accompanied by indicators of structure Indicators of well-being should be accompanied by indicators of structure The Handbook should debate and recommend an inclusive definition of all farms The Handbook should debate and recommend an inclusive definition of all farms Focus on household indicators for family farms, but include indicators for nonfamily farms. What is a nonfamily farm? Focus on household indicators for family farms, but include indicators for nonfamily farms. What is a nonfamily farm? Develop a data collection system that allows for a continually changing farm and household structure Develop a data collection system that allows for a continually changing farm and household structure

US examples of the need to change approaches to respond to real world changes Household income Household income Contracting Contracting Corporate farming Corporate farming

Compare this storyline on “Per capita disposable personal income of farm and nonfarm residents, ” … Source: USDA, ERS. Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, ECIFS3-3, Sept

Compare this storyline on “Per capita disposable personal income of farm and nonfarm residents, ” … Source: USDA, ERS. Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, ECIFS3-3, Sept

…to this storyline: “Average farm operator household income by source compared to all U.S. household income, f” d

Consideration of the Structure of farms: EU and US Two dimensions of structure: size and off-farm work Two dimensions of structure: size and off-farm work Farm definition Farm definition Size definition Size definition Compare the size distribution in 2007 Compare the size distribution in 2007 Dynamics are missingDynamics are missing Compare changes, Compare changes, Compare off-farm work, Compare off-farm work,

EUNLITUS Source: For EU, FFS. For US, ARMS. Background to interpreting the comparative size distributions

Figure 1. Size distribution of holdings, U.S. and EU-15, (Size classes defined by hectares) Sources: For U.S., ARMS. For EU, FFS. Percent of holdings U.S. EU

Figure 2. Size distribution of holdings, U.S. and EU-15, excluding small holdings, (Size classes defined by hectares) Source: For U.S., ARMS. For EU, FFS. Percent of holdings U.S. E.U

Figure 3. Size distribution of holdings, Netherlands and Italy, (Size classes defined by hectares) Source: FFS. Percent of holdings Netherlands Italy

Figure 4. Size distribution of holdings, Netherlands and Italy, excluding small holdings, (Size classes defined by hectares) Source: FFS. Percent of holdings Netherlands Italy

Figure 5. Size distribution of holdings, U.S. and EU-15, (Size classes defined by ESU) Sources: For U.S., ARMS. For EU, FFS. Percent of holdings U.S. EU

Figure 6. Size distribution of holdings, U.S. and EU-15, excluding small holdings, (Size classes defined by ESU) Source: For U.S., ARMS. For EU, FFS. Percent of holdings U.S. E.U

Figure 7. Size distribution of holdings, Netherlands and Italy, (Size classes defined by hectares) Source: FFS. Note: No farms had <2 hectares in NL. Percent of holdings Netherlands Italy

Figure 8. Size distribution of holdings, Netherlands and Italy, excluding small holdings, (Size classes defined by hectares) Source: FFS. Percent of holdings Netherlands Italy

Figure 9. Share of farms engaged in pluriactivity, US and EU-15, 2007 Sources: For U.S., Census of Ag. For EU, FFS. Percent

Figure 10. Structural characteristics by farm size, U.S., 2007 Source: 2007 ARMS. Percent of farms Farms with =>100 ESU’s are 10% of farms, 45% of hectares, and 81% of production.

Figure 11. Multifunctionality activities by farm size, U.S., 2007 Source: 2007 ARMS. Percent of farms < Farms with =>100 ESU’s are 10% of farms, 45% of hectares, and 81% of production.

Emerging issues Accountability—new policy environment Accountability—new policy environment Most critical issues extend beyond ag and rural areas—underscores the need for an integrated framework Most critical issues extend beyond ag and rural areas—underscores the need for an integrated framework Farm household issues: Measuring size (SO), Dynamics, Data collection from very large operations, Nontraditional business and production practices, Multifunctionality activities. MF varies by farm size. Farm household issues: Measuring size (SO), Dynamics, Data collection from very large operations, Nontraditional business and production practices, Multifunctionality activities. MF varies by farm size.