Those who have been bemoaning the demise of the family farm should read a paper presented by the National Agricultural Statistics Service at the recent USDA Agricultural Outlook Forum.
NASS representatives say that nearly one-quarter of the nation's farms that have multiple operators have operators in different generations. The paper's authors say those numbers imply the farms may have a succession plan, but it also can be interpreted to mean that most of those operations are run by members of the same family.
“Every five years when the census of agriculture results are released, the agricultural industry becomes alarmed about the advancing ages of farmers and what it will mean for farm structure and farm succession,” said Rich Allen, NASS deputy administrator who presented the paper.
Allen said NASS has had limited information to shed light on these concerns until the 2002 Census of Agriculture. (Allen says farm succession involves the planning of farm ownership or management to keep the business in operation when the present operator retires or leaves.)
During the 2002 Census of Agriculture, he said, new questions were asked about the number of operators on each farm, operator demographics for the first three operators, and the number of people per household.
The analysis of U.S. farm operator demographics presented at the Outlook Forum examined the relationships among these new data items collected in order to identify agricultural operations that might have succession plans in place.
For this paper, a finding of operators from different generations on a single operation indicated a possible succession plan. This analysis defined different generations as a span of 20 years or more between the oldest operator and at least one of the other operators, says Allen.
According to the 2002 Census of Agriculture, of the 2,128,982 operations in the U.S., 37.7 percent reported multiple farm operators, indicating a potential for farm succession.
However, since many of the multiple operators were spouses or other individuals of a similar age as the principal operator, only 24.1 percent of those farms with multiple operators (which equates to 9.1 percent of all 2.1 million U.S. farms — including those reporting only one operator) had operators across generations, showing evidence of a possible farm succession plan in place.
“Further analysis of the 2002 Census data reveals some operations may have already implemented a succession plan,” Allen notes. “More than 60 percent of male principal operators under 25 years of age and almost half of male principal operators between 25 and 34 years of age, who reported a male second operator, currently have a second or third operator at least 20 years their senior.
“This analysis also examines the apparent correlation between farm income and multiple generation operations. Studying the relation between operator demographics in the 2002 Census (for up to three operators on each farm) and data on farm income reveals that as farm income rises, the percentage of multiple generation operations rises as well.”
Of the operations reporting multiple operators and having under $100,000 in farm sales, 1 out of 5 (21.4 percent) of those operations have multiple generational operators. For multiple operator farms reporting $100,000 to $249,999 sales, 34.3 percent qualify as a multiple generation operation.
This percentage continues to increase to 38.8 percent for multiple operator farms with $250,000 or more in farm sales; almost 2 out of 5 of those operations have multiple generation operators. Thus, these higher income operations reporting multiple operators are almost twice as likely to have multiple generational operators as those farms with less than $100,000 in sales.
Although this paper draws conclusions on the possible percentages of U.S. farm operations with succession plans in place, NASS officials warn that specific data on farm operation succession planning were not collected on the 2002 Census of Agriculture.
“Farm succession surveys require a long series of questions in order to gain a fuller understanding of the considerations which go into succession planning,” said Ginger Harris, NASS statistician, who co-authored the paper with Allen. “These are far too many questions than could be asked in a general purpose census data collection.”
USDA-NASS does conclude that the percent of U.S. farm operations with possible succession plans in place varies considerably by state, income sales class and type of farm, she said.
To access the entire in-depth analysis paper, “What We Know about the Demographics of U.S. Farm Operators,” including the complete narrative, maps, and tables, click on http://www.nass.usda.gov/census/census02/otheranalysis/demographicpaper022505.htm.
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