Transcript The Future of Family Farms

The Future of Family Farms
Paul Lasley
Department of Sociology
Iowa State University
What is a family farm?
• Labor
• Capital
• Management
• Residency
• Dependency
• Ownership of land
The Twin Pillars of Rural Culture
Non farm
communities
Farm dependent
communities
Changes in the State
Communities
in
Transition
•
•
•
•
•
Population mix
Industrial base
Occupational shifts
Lifestyle choices
Linkage to urban
places
Changes in Production Agriculture
• Decline in farm
numbers
• Increased farm size
• Contracts &
integration
• Dual agriculture
Agriculture
in
Transition
Non Farm
Rural
Communities
Production
Agriculture
Conflicts at the Interface
Number of U.S. Farms
8
Millions
6.8
7
6
5
4
3
2
1.9
1.9
1
0
1865 1975 1985 1900 1910 1920 1930 1940 1950 1960 1970 1980 1992
Industrial
Petro-chemical
Bio-genetic &
Managerial
Rural, Urban and Farm Population in Iowa
3
Millions
2.5
2
1.5
1
0.5
0
1940
1950
1960
Farm
1970
Rural nonfarm
1980
Urban
1990
2000
Trends in Post 1980s Farm Crisis
• Quite similar to the post-Depression years of the
1930s
• Many farm families are tired of economic hardship
and are encouraging their children to look
elsewhere
• Young people that are selecting careers in 2000s
are the products of the 1980s farm crisis. They
grew up in a climate characterized by tough
economic times and pessimism.
Fig. 7
For farm youth born since 1980, what
have been dominant messages?
•
•
•
•
•
•
•
•
•
Hard times, economic hardship
We can’t afford this
Limited opportunities
Get an education & find something else to do
There are better opportunities elsewhere
There is no future in family farms
Get big or get out
Good place to live, poor way to make a living
It’s a tough way to make a living
Fig. 8
Media Messages about farming in the
post 1980s farm crisis
Movies
Literature
•
•
•
•
• A Thousand Acres
• Broken Heartland:
Country
The River
Places in the Heart
Troublesome
Creek
The Rise of America’s
Rural Ghettos
• Lone Tree
Fig. 9
How this is reflected in national numbers
<25
1982
%
2002
%
1982–2002
Change
% Change
62,336
2.8
20,850
1.1
25–34
35–44
45–54
55–64
65+
Total
293,810 443,420 505,412 536,402 399,596 2,240,976
13.1
19.8
22.6
23.9
17.8
128,455 371,422 466,729 427,354 497,029 1,911,859
6.7
19.4
24.4
22.3
26.0
-41,486 -165,355 -71,998 -38,683 -109,048 +97,433 -329,117
-66.6
-56.3
-16.2
-7.6
-20.3 +24.4
-14.7
Who will be the future farmers in Iowa?
<25
25–34
35–44
45–54
55–64
65+
Total
2,852
17,458
21,282
21,744
25,287
16,557
105,180
%
2.7
16.6
20.2
20.7
24.0
15.7
2002
869
5,282
17,331
24,555
20,227
22,391
%
0.1
5.8
19.1
27.1
22.3
24.6
-1,983
-12,176
-3,951
+2,811
+5,060
+5,837
-14,525
-69
-70
-18
+11
+25
+26
-13.8
1982
1982–2002
Change
% Change
90,655
How many beginning farmers in Iowa?
Under 25 ...............
25-34 ....................
35-44 ....................
45-54 ....................
55-64 ....................
65+.......................
Total
2002 Census of Agriculture
Number
869
5,282
17,331
24,555
20,227
22,391
90,655
Percent
0.1
6.0
19.1
27.1
22.3
25.1
100.0
Population Change and Demand
for New Foods
Consumer Driven Agriculture
Population projections
Hispanics
Asians
Whites
Blacks
2002
12.6%
3.9%
71.0%
12.0%
2020
18.0%
5.0%
64.0%
13.0%
 U.S. population stands at 281 million and by 2020
will grow to about 331-361 million (50-80 million).
Influence of consumer driven
agriculture
Consumer Driven Agriculture
 Demand for farm products will increase
as population increases
 Demographic shifts—shifts in food tastes
and preferences
 Increasing per capita income will reward
quality
Consumer Driven Agriculture
 Aging baby boomers, those born between
1946-64 will approach 54 million by 2020
 Market growth and potential for older
population, less active, higher standard of
living
 More expensive cuts of meat, exotic
vegetables, luxury food items, ready to eat,
higher priced restaurants, etc.
Consumer Driven Agriculture
 Per capita income growth is projected to be
about 1% annually between 2000-2020,
compared with 1.2% that occurred between
1988-98
 Key question is how much of this higher
disposable income will be spent on food and
what types of food will be demanded
Consumer Driven Agriculture
Projections are:
 More fruit, vegetables, fish, poultry, cheese,
yogurt and prepared foods
 More eating out—Dash board dining
 More attention to diets, health and wellness
Why young people choose farming?
• What values shape this career decision?
– Freedom and independence
– Be own boss
– Family—good place to raise children
– Being able to work outdoors
– Living in the country
– Family tradition
– Enjoy working with nature
The social values vs. economic reality
• Decision to farm must reflect both the social
values of wanting to farm with the economic
realities of the marketplace.
• “Good place to live, if you don’t have to
make your living from it.”
What is farming?
• Farming is not about driving a tractor
• Farming is increasingly about:
– Reading the market
– Financial management
– Marketing
– Producing for a market segment
– Negotiation of contracts
What do farmers enjoy?
•
•
•
•
•
•
Crop and field work
Working with livestock
Purchasing equipment
Marketing
Exploring new idea
Record keeping/paperwork
Farm Activity Preferences
Dislike
Greatly
Enjoy
Greatly
Indifferent
—————————— Percentage ——————————
Crop/Field work…………………………
1
2
12
38
47
Exploring new ideas……………………
1
4
24
48
24
Working with livestock………………..
7
8
21
34
30
Working on machinery………………..
4
9
27
39
22
Marketing/Purchasing livestock……
9
12
31
33
15
Marketing/Purchasing crops………..
5
16
32
37
10
Purchasing equipment………………..
6
14
33
34
13
Record keeping/paperwork………….
11
22
33
25
9
Going to farm meetings……………….
14
21
36
23
5
Desires about Succession
(1996 Farm Poll, n=1,982)
• 75%… would like farm to remain in family when
they retire
• 68%… if they had it to do over, they would still
choose farming
• 63%… would continue if suddenly became rich
• 55%… would like to children to take over farm
when they retire (21% were undecided
and 24% replied “no”)
• 30%… would recommend farming to a friend
(24% were not sure, 46% said “no”)
What will happen to your farm
when you retire?
 One of my children will take it over
and eventually inherit .........................
 I will cash rent to a tenant ..................
 Don’t know ........................................
 Crop share to someone.......................
 Not applicable—don’t own land............
 Sell to one of my children ...................
 Sell to a nonfamily member.................
25%
20%
15%
11%
11%
10%
8%
2004 Iowa Farm and Rural Life Poll
(n=1,514)
• 57% would not encourage young people to enter
farming
WHY?
• 87% young people cannot afford to buy the equipment,
land, crop inputs, etc
• 73% farm profits too low
• 73% there is too much risk
• 65% land is not available
• 20% requires too much manual labor
• 15% young people not interested in living in country
Some observations
• Age distribution of farming is probably not much
different on farms than what exists on main street
in many Iowa small communities.
• We have evolved from a nation of self-employed to
one of employees. The question of succession is
broader than farming, it needs to raised in terms
of other forms of small businesses…grocery stores,
farm supply, banking, service stations, equipment
dealers, furniture stores, etc.
Recognition that Entry into Farming is a
Process not an event
• Most studies of succession have focused on
the legal, financial and public policy aspects
• More attention should focus on the family
processes
• Too often in ignoring the role of the family,
we have saved the farm and lost the family.
• Small business succession, whether a farm
or nonfarm enterprise is a family affair
What are the implications of unabated
consolidation in business and industry?
•
•
•
•
Quality of products or service
Changes in the occupational structure
Attachment to place
Environmental consequences of
consolidation
• Vulnerabilities of consolidation
• Changes in opportunity structure
Business Succession
• Raises questions about what can or should be
done to create opportunities for the next
generation
• Highly mobile, energetic, well-educated young
people will migrate to areas to where there are
better opportunities
• Hence, it is critical that we think in terms of
creating opportunities for future Iowans
Skills Needed to be Successful
• Entrepreneurs
• Risk Management
• Complex interactions between farming and
the environment
• Marketing
• Food safety and quality
Identifying Opportunities
• Get an education
– Farming is about acquiring and applying
knowledge
– Analytical and reasoning skills
– Creative and critical thinking
– “Farming in an information age”
• Travel
– See how others are farming
– Travel abroad
– Exchange programs
• Explore the world on the Internet
• Learn about other cultures
– Learn another language
• Ask Questions
• Seek out a mentor
– Someone who can share their stories of
successes and failures
• Learn about existing resources to assist you.
– Beginning farmer loans
– Beginning farmer programs
Thank you
Needs of Beginning Farmers
• 95%… agreed that beginning farmer’s spouse
need to have an off-farm job
• 92%… agreed beginning farmer needs to have an
off-farm job
• 86%… agreed assistance from family or other
farmers will be necessary
• 68%… beginning farmers will be limited to sons
and daughters of current farmers
• 58%… beginning farmer should live on farm
• 36%… beginning farmer should buy land
Why should society be concerned about
the structure of local business?
• Population retention and quality of life
reflects opportunities
• The life blood of many of Iowa’s 839 rural
communities depends upon farming and
rural population
• The viability of social institutions depends
upon opportunity structure
What do beginning farmers offer?
• LABOR
• MANAGEMENT SKILLS
• TECHNICAL COMPETENCE
To be successful…you need to:
Figure out how you you can become the low
cost producer against everyone who is
producing the same products as you.
OR
Figure out a niche where there is limited or no
competition…where you offer a superior,
highly differentiated product.
Consequences of these trends
• Farm consolidation
• Specialization in production
• Movement from general farms producing a
wide variety of crops and livestock to one or
two commodities
• Vulnerabilities of specialization
• Fluctuations and increased risk
Secondary Consequences
•
•
•
•
Decline in farm numbers
Larger farms
More capitalization of existing farms
Aging of farm population
– Fewer opportunities for beginning farmers
– Technology enables farmers to continue farming
longer
Consequences
• Loss of farm population (out migration)
• Rural neighborhoods vacant during the day,
owing to larger numbers of part-time farms
• Industrialization of livestock
• Increase in rural nonfarm residences
Farm Plans in Next 5 years
1999 Farm Poll (n=2,583)
• 15% quit farming
• 13% take son or other family member into
farming operation
• 12% quit raising cattle
• 21% quit raising hogs
Of those planning to quit farming in the
next 5 years, 53 % were retiring
• Of those retiring…what will happen to your
farm?
– 59% family member will continue it
– 60% farm will be rented to nonfamily
– 21% farm will be sold
What are Farmers Predicting for the Next
10 years (1999-09)?
• 99% likely that farm number will continue to
decline
• 95% low farm prices will put many out of
business
• 96% more reliance on off-farm income
• 82% cost of living will prevent many from
retiring at age 65
• 18%… Contracting in farming will provide
farmers with better incomes
• 5%… more young people will enter farming
Directions in Economic Development
(2001 Farm Poll)
• 67%… tax incentives for employers who hire
Iowa graduates
• 69%… emphasize production agriculture and
related industries
• 76%… raising wages is needed to attract
and retain people
• 67%… emphasize main street development