Abstract—Small family farms
account for most land owned by farms, making them important to conservation.
Leased land is a large share of farm operations, and farmers'
tenure affects their use of conservation measures, particularly
measures with a long payback period. The trend of concentrating livestock
on fewer acres than in the past raises environmental concerns.
Ownership of U.S. Land
The land surface of the United States covers 2.3 billion acres.
Private owners held 61 percent in 2002, the Federal Government
28 percent, State and local governments 9 percent, and
Indian reservations 3 percent (fig. 1.3.1). Virtually all cropland is privately owned, as is three-fifths of
grassland pasture and range and over half of forestland. Federal,
State, and local government holdings consist primarily of forestland,
rangeland, and other land. Most land in Federal ownership—largely
in the West—is managed by the Department of the Interior (68
percent) and the Department of Agriculture (28 percent) (U.S. GSA,
2005). (For more information, see AREI
Chapter 1.1, Land Use.)
Farm operators do not own all the land used in agriculture. According
to the 1999 Agricultural Economics and Land Ownership Survey (AELOS),
farmers held 58 percent of the land in farms in 1999 (USDA, 2001).
These landowning farmers also made up 58 percent of the 3.4 million
farmland owners.
Nonoperator landlords accounted for the remaining 42 percent of
land in farms. Ninety-five percent of nonfarm landlords were individuals/families
or partnerships. Of these unincorporated landlords, 55 percent were
at least 65 years old. Many nonfarm landlords have a historic connection
to farming. Among the people who have exited farming or inherited
farmland since the number of farms peaked during the Great Depression,
a number have retained ownership of some or all their land (Hoppe
et al., 1995).
Farm Numbers, Farm Types, and Conservation Programs
The number of farms has declined dramatically since its peak of
6.8 million in 1935, with most of the decline occurring during the
1940s, 1950s, and 1960s (fig. 1.3.2).
The decline in farm numbers has leveled off since the 1970s. By
2002, 2.1 million farms remained. The remaining farms have a much
larger average acreage, but averages mask differences among farms.
Today's farms range from very small retirement and residential
farms to industrialized operations with sales in the millions. Part
of this diversity stems from the very low sales threshold ($1,000)
necessary for an operation to qualify as a farm for statistical
purposes.
One way to address the diversity of farms is to categorize them
into more homogeneous groups. The farm typology developed by ERS
identifies five groups of small family farms (sales less than $250,000):
limited-resource, retirement, residential/lifestyle, farming-occupation/low-sales,
and farming-occupation/high-sales (see box). The typology also includes
large family farms, very large family farms, and nonfamily farms.
For more information about farm structure, see the Farm
Structure Briefing Room.
Farm Typology Definitions
The farm typology focuses on the "family
farm," or any farm organized as a sole proprietorship,
partnership, or family corporation. Family farms exclude farms
organized as nonfamily corporations or cooperatives, as well
as farms with hired managers.
Small family farms
Other family farms
Limited-resource
farms. Small farms with sales less than $100,000 and
low operator household income (defined as less than the poverty
level for a family of four in the current and previous years
or less than half the county median household income both years.)
Retirement farms. Small farms whose operators
report they are retired.1
Residential/lifestyle
farms. Small farms whose operators report a major occupation
other than farming.1
Farming-occupation
farms. Small family farms whose operators report farming
as their major occupation.1
•
Low-sales farms. Sales less than $100,000.
• High-sales farms. Sales between $100,000
and $249,999.
Large family
farms. Sales between $250,000 and $499,999.
Very large family farms. Sales
of $500,000 or more.
Nonfamily farms
Nonfamily
farms. Farms organized as nonfamily corporations or
cooperatives, as well as farms operated by hired managers.
1Excludes
limited-resource farms whose
operators report this occupation.
For more information about the farm typology, see the 2004
Family Farm Report (Banker and MacDonald, 2005).
Size Variation Among Typology Groups
Small family farms dominate the farm count, making up 91 percent
of all U.S. farms in 2003 (table 1.3.1).
Table
1.3.1—Selected farm structural characteristics, by the
farm typology, 2003
Farm
typology group
Farms
Value
of
production
Sales
less than
$10,000
Tenure
Full
owner
Part
owner
Tenant1
Small
family farms:
—Pct.
of U.S. total—
—Percent
of group—
Limited-resource
11.1
1.4
71.8
68.8
24.3
*6.9
Retirement
14.6
1.5
75.6
79.0
19.4
1.6
Retirement/lifestyle
42.1
5.2
75.8
70.6
25.5
3.9
Farming-occupation:
Low-sales
17.2
6.6
37.0
54.9
36.5
8.6
High-sales
6.4
12.3
na
19.1
68.2
12.7
Large
family farms
4.0
14.4
na
20.9
66.4
12.6
Very
large family farms
3.1
44.7
na
24.1
58.7
17.2
Nonfamily
farms
1.7
13.7
31.9
65.5
23.7
10.8
All
farms
100.0
100.0
57.7
62.1
31.7
6.1
na
= Not applicable.
*
= Standard error is between 25 and 50 percent of the estimate.
1Farms
that rent all the land that they operate. Also includes farms
owning less than 1 percent of the land they operate.
Source:
USDA, ERS, 2003 Agricultural Resource Management Survey, Phase
III.
In addition, very small farms (sales less than $10,000) make up
more than half of all farms. Very small farms account for a particularly
large share of farms in the limited-resource (72 percent), retirement
(76 percent), and residential/lifestyle (76 percent) groups. Production,
however, is concentrated among larger farms; small farms account
for only 27 percent of the total value of production.
The smallness of most farms has implications for conservation
and the environment. An ERS study found that smaller corn farms
are less likely to use conservation tillage than are larger farms
(Soule et al., 1999 and 2000). The practice is more practical for
larger farms because they have more acres over which to spread the
cost of new or retrofitted equipment necessary to adopt conservation
tillage. Small farms whose operators are retired or farm part-time
are also less likely to adopt conservation tillage, possibly because
of hesitancy to change familiar production practices. Small farms,
however, participate widely in the Conservation Reserve Program
(CRP) and the Wetlands Reserve Program (WRP). (For more information
about conservation tillage, see AREI
Chapter 4.2, Soil Management and Conservation.)
Distribution of Conservation Program Payments by Type of
Farm
High-sales small farms, large family farms, and very large family
farms received a disproportionate share of commodity program payments
relative to their small share of farms in 2003 (table 1.3.2).
Table
1.3.2—Share of government payments and related items,
by the farm typology, 2003
Farm
typology group
Government
payments
Harvested
acres of
program
crops3
Land
enrolled
in CRP
and WRP
Commodity
programs1
Conservation
programs2
Percent
of U.S. total
Small
family farms:
Limited-resource
2.1
6.6
2.4
5.7
Retirement
2.1
19.9
1.8
22.5
Residential/lifestyle
6.3
26.4
6.4
25.7
Farming-occupation:
Low-sales
10.1
17.6
9.9
18.7
High-sales
22.3
9.6
23.3
9.5
Large
family farms
22.6
8.5
23.9
8.5
Very
large family farms
31.8
7.2
29.8
5.4
Nonfamily
farms
2.7
4.2
2.6
4.0
All
farms
100.0
100.0
100.0
100.0
1Direct
payments, countercyclical payments, loan deficiency payments,
marketing loan gains, net value of commodity certificates, peanut
quota buyout, milk income loss contract payments, etc.
2Payments
from the Conservation Reserve Program (CRP), the Wetlands Reserve
Program (WRP), and the Environmental Quality Incentives Program
(EQIP).
3Food
and feed grains, soybeans, other oilseeds, sugar beets, and
sugar cane.
Source:
USDA, ERS, 2003 Agricultural Resource Management Survey, Phase
III.
These farms harvest most of the land planted to program commodities
and therefore receive three-quarters of commodity program payments.
However, CRP and WRP—the two major conservation programs—are
targeted at particular types of land, not commodities. Since small
farms own 70 percent of the land held by farms, they play a large
role in natural resource and environmental policy. (For more information
about CRP and WRP, see AREI
Chapter 5.2, Land Retirement Programs.)
Retirement, residential/lifestyle, and low-sales farms account
for nearly two-thirds of conservation payments and a similar share
of the land farmers enrolled in the CRP and WRP. Participating farmers
in each of the three groups tend to enroll large shares of their
land in these programs: 46 percent of the land operated on retirement
farms, 28 percent on residential/lifestyle farms, and 23 percent
on low-sales farms. In contrast, enrollment ranges from 5 to 9 percent
for participating high-sales, large, and very large farms.
Because their main job is off-farm, residential/lifestyle operators
are limited in the amount of time they can spend farming. As a result,
residential/lifestyle farmers find CRP and WRP attractive, since
these programs require little time. Given their life-cycle position,
many retired farmers have land available to put into conservation
uses. The same forces may also be acting on low-sales operators,
who average 57 years of age and may be scaling down their operations.
If an off-farm job and advanced age are major determinants of land
going into conservation uses, it may be relatively easy to get smaller
farms to enroll land in the programs. Getting larger farms to enroll
more of their land might require higher payments, if the opportunity
cost of idling their land is higher.
Land Tenure
Farm operators leased 38 percent of their total farmland in 2002,
down from 40 percent in 1997 and 43 percent in 1992, according to
the census of agriculture. This decline may reflect increasing rental
costs as parcels of land become smaller. Parcels of farmland available
to rent tend to become subdivided with time due to division among
heirs (Raup, 2003). Smaller parcels increase transaction costs to
operators assembling land to expand their operations. Still, rented
land as a share of total farmland is higher than the 35-percent
rate that prevailed in the 1950s and 1960s.
About 38 percent of all farms rented land in 2003, 32 percent
as part owners and 6 percent as tenants (table 1.3.1). Land leasing
has changed from a way for beginning farmers to enter agriculture
to a way for established farmers to access additional land. Renting
allows farms to expand without the debt and commitment of capital
associated with ownership (Reimund and Gale, 1992). In fact, about
17 percent of very large family farms are tenants, a larger percentage
than in any other group.
Conventional wisdom holds that farmland owners have a long-term
interest in their land and thus are more likely than renters to
adopt conservation practices. Soule and others (1999 and 2000) found
this to be true among corn farmers, at least in the adoption of
conservation practices that provide only long-term benefits, such
as grassed waterways and strip cropping.
The situation was different for conservation tillage, which can
increase profits in the short run by maintaining or increasing yields
while reducing machinery, fuel, and labor costs (Magleby, 2003).
Cash-renters are less likely than owner-operators to use conservation
tillage, but share-renters appear to act like owner-operators in
adopting conservation tillage. Share-renters may have an incentive
to adopt conservation tillage, if the landlord bears some of the
costs that may increase under conservation tillage, such as herbicide
expenditures. Share-landlords are also more likely
to be involved in management decisions than cash-landlords, which
may make share-renters act more like owners.
Concentration of Production
Concentration of agricultural production on fewer farms and fewer
acres has grown since the beginning of the 20th century.
In 1900, half of farm sales came from approximately 17
percent of farms and 43 percent of the land in farms (fig.
1.3.3).
By 2002, half of farm sales came from 2 percent of U.S. farms
and 11 percent of the land in farms. This reflects both a growing
diversity in farm size and an increasing number of very large farms.
The concentration of agricultural production raises concerns about
potential harm to the environment, especially from livestock operations.
Data from the census of agriculture show that the number of U.S.
farms selling hogs decreased by 94 percent between 1959 and 2002,
while hog sales more than doubled. Similar trends have occurred
among farms selling dairy products, cattle, and broilers. As livestock
producers expand, they are more likely to buy feed grown elsewhere,
reducing the amount of land they have available for manure application,
the predominant method of disposal (Ribaudo et al. 2003).
More livestock production on fewer farms may not pose a problem
if farms with livestock have enough land to absorb the manure produced.
In fact, most farms currently have adequate land to safely use the
manure that their livestock produce. Many livestock producers, however,
do not apply manure to all their land (Ribaudo, 2003). Manure is
expensive to haul, so many producers spread more manure than crops
need on the fields nearest the livestock facility. In addition,
adequate farmland for manure disposal may not exist in some areas
with large concentrations of livestock. For example, there are 68
counties where nitrogen in manure from confined livestock and poultry
farms is estimated to exceed the county's nitrogen needs.
Excess phosphorus is even more common, occurring in 152 counties.
(For more information, see AREI
Chapter 4.5, Animal Agriculture and the Environment.)
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