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The Future of Family Farms

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Title: The Future of Family Farms


1
The Future of Family Farms
  • Paul Lasley
  • Department of Sociology
  • Iowa State University

2
What is a family farm?
  • Labor
  • Capital
  • Management
  • Residency
  • Dependency
  • Ownership of land

3
The Twin Pillars of Rural Culture
Non farm communities
4
Changes in the State
  • Population mix
  • Industrial base
  • Occupational shifts
  • Lifestyle choices
  • Linkage to urban places

5
Changes in Production Agriculture
  • Decline in farm numbers
  • Increased farm size
  • Contracts integration
  • Dual agriculture

6
Non Farm Rural Communities
Production Agriculture
Conflicts at the Interface
7
Number of U.S. Farms
8
Bio-genetic Managerial
Industrial
Petro-chemical
9
Rural, Urban and Farm Population in Iowa
Millions
10
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
11
For farm youth born since 1980, what have been
dominant messages?
  • Hard times, economic hardship
  • We cant 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
  • Its a tough way to make a living

Fig. 8
12
Media Messages about farming in the post 1980s
farm crisis
  • Literature
  • A Thousand Acres
  • Broken Heartland The Rise of Americas Rural
    Ghettos
  • Lone Tree
  • Movies
  • Country
  • The River
  • Places in the Heart
  • Troublesome Creek

Fig. 9
13
How this is reflected in national numbers
lt25 2534 3544 4554 5564 65 Total 1982 62,336
293,810 443,420 505,412 536,402 399,596 2,240,976
2.8 13.1 19.8 22.6 23.9 17.8
2002 20,850 128,455 371,422 466,729 427,354 497,02
9 1,911,859 1.1 6.7 19.4 24.4 22.3 26.0
19822002 Change -41,486 -165,355 -71,998 -38,683
-109,048 97,433 -329,117 Change -66.6 -56.3 -16
.2 -7.6 -20.3 24.4 -14.7
14
Who will be the future farmers in Iowa?
lt25 2534 3544 4554 5564 65 Total 1982 2,852
17,458 21,282 21,744 25,287 16,557 105,180 2.7 1
6.6 20.2 20.7 24.0 15.7
2002 869 5,282 17,331 24,555 20,227 22,391 90,655
0.1 5.8 19.1 27.1 22.3 24.6
19822002 Change -1,983 -12,176 -3,951 2,811 5,0
60 5,837 -14,525 Change -69 -70 -18 11 25 26
-13.8
15
How many beginning farmers in Iowa?
2002 Census of Agriculture
16
Population Change and Demand for New Foods
17
Consumer Driven Agriculture
  • Population projections
  • 2002 2020
  • Hispanics 12.6 18.0
  • Asians 3.9 5.0
  • Whites 71.0 64.0
  • Blacks 12.0 13.0
  • U.S. population stands at 281 million and by 2020
    will grow to about 331-361 million (50-80
    million).

18
Influence of consumer driven agriculture
19
Consumer Driven Agriculture
  • Demand for farm products will increase as
    population increases
  • Demographic shiftsshifts in food tastes and
    preferences
  • Increasing per capita income will reward quality

20
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.

21
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

22
Consumer Driven Agriculture
  • Projections are
  • More fruit, vegetables, fish, poultry, cheese,
    yogurt and prepared foods
  • More eating outDash board dining
  • More attention to diets, health and wellness

23
Why young people choose farming?
  • What values shape this career decision?
  • Freedom and independence
  • Be own boss
  • Familygood place to raise children
  • Being able to work outdoors
  • Living in the country
  • Family tradition
  • Enjoy working with nature

24
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 dont have to make
    your living from it.

25
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

26
What do farmers enjoy?
  • Crop and field work
  • Working with livestock
  • Purchasing equipment
  • Marketing
  • Exploring new idea
  • Record keeping/paperwork

27
Farm Activity Preferences
28
Desires about Succession (1996 Farm Poll,
n1,982)
  • 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)

29
What will happen to your farm when you retire?
30
2004 Iowa Farm and Rural Life Poll (n1,514)
  • 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

31
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.

32
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

33
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

34
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

35
Skills Needed to be Successful
  • Entrepreneurs
  • Risk Management
  • Complex interactions between farming and the
    environment
  • Marketing
  • Food safety and quality

36
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

37
  • 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

38
  • 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

39
  • Thank you

40
Needs of Beginning Farmers
  • 95… agreed that beginning farmers 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

41
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 Iowas 839 rural
    communities depends upon farming and rural
    population
  • The viability of social institutions depends upon
    opportunity structure

42
What do beginning farmers offer?
  • LABOR
  • MANAGEMENT SKILLS
  • TECHNICAL COMPETENCE

43
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.

44
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

45
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

46
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

47
Farm Plans in Next 5 years 1999 Farm Poll
(n2,583)
  • 15 quit farming
  • 13 take son or other family member into farming
    operation
  • 12 quit raising cattle
  • 21 quit raising hogs

48
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

49
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

50
  • 18… Contracting in farming will provide farmers
    with better incomes
  • 5… more young people will enter farming

51
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
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