The last Agricultural Resource Management Survey carried out in 2011, and published in 2012 by the USDA, reviewed a representative sample of over 2,172 million farms in the US.
In his article, of which we include several excerpts below1
, Didier Caraes stresses the importance of national agricultural policies in France and the United-States, and draws up a map of US agriculture. This map shows a significant difference in the income and structure of farms, and the strong hold of family-owned farms both in terms of land ownership and in terms of economic performance.
Didier Caraes also points out that 'from a purely structural point of view, large scale family-owned farms generate a higher income than corporate farms, as opposed to what is generally assumed. The author also indicates that global farming income has increased in the United States, as opposed to France where global farming income has been steadily decreasing over the last forty years.
At a time when the farming strategies of the European Union and the United States are about to undergo changes, prompted by the Farm Bill and the PAC, this information provides an interesting insight, and attests to the efficiency of the US farming model which strives to provide efficient tools for keeping farming income at a profitable level.
momagri Editorial Board
Contrary to popular belief, US farming statistics show that there is a wide heterogeneity in US agriculture, and that family-owned farms are predominant.
Over 2 million farms in the United States in 2011
France's farming statistics offer a comprehensive range of economic and structural data. Indeed, the weight of state intervention requires that reliable statistical data be available in order to evaluate the efficiency of implemented policies. This is also the case in the United States, where strategic policies have been implemented in favour of agriculture for decades. Just like in France, farming statistics offer a comprehensive range of data.
The last Agricultural Resource Management Survey carried out in 2011, and published in 2012 by the USDA, reviewed a representative sample of over 2,172 million farms. The typology established by US statisticians is based on turnover and capital ownership, and distinguishes three large groups of farms:
- 1,896,000 small family-owned farms generating a turnover above $ 1,000 (statistical threshold for entities considered as farms) but below $ 250,000, of which:
A stable income in the medium term
• 352,000 retirement farms, run by retired farmers looking for an additional income, 902,000 residential/lifestyle farms, without any clearly defined economic objective,
• 642,000 farming occupation farms, generating a turnover below $ 250,000, and constituting the main source of income of their owners.
- 219,000 large scale family-owned farms. Farms generating a turnover above $ 250,000 and whose capital is family-owned. Within this last category, 2 types of farms are distinguished:
• large farms, generating an annual turnover below $ 499,000
• and very large farms, generating an annual turnover above $ 500,000.
- 58,000 corporate farms, where more than half of the capital is owned by shareholders other than the farmer or his family. This last category includes the largest farms in the US. Indeed, 5,800 of these farms generate a turnover above $ 1,000,000.
Given the structural diversity of US agriculture, it would be useless determining a representative indicator for the average income based on the global results of all these farm categories.
In terms of economic performance, the 219,000 large scale family-owned farms and the 58,000 corporate farms generate 85% of the global US farming income. As a matter of fact, the total number of these two farm categories (277,000) is almost equal to the number of professionally-run farms in France: a total of 320,000 in 2010 (‘average and large scale farms’ as defined by the nomenclature of the Ministry of Agriculture).
From a structural point of view, large scale family-owned farms generate a higher income than corporate farms, as opposed to what is generally assumed. These two categories include a wide range of farms, some of which share strong similarities but differ in terms of capital ownership (family or corporate).
Only 18 % of non family-owned farms are run as corporate farms. The similarity in the average income curves for these two categories of very large farms emphasizes the strength and the weight of family-owned farms in the US, and the fact that their economic performance is globally equal to that of corporate-owned farms.
Diversity and performance of US agriculture
The structural statistics of US agriculture show that there is a wide diversity of farms in the United States. Small low-sale farms with a modest economic contribution are widespread nationwide, and play an essential role in terms of land and environmental management. These small farms provide added-value to two-thirds of farming land in the US, whereas the remaining third is in the hands of very large farms (family or corporate-owned), which generate 85% of the total income of US agriculture. These very large farms are mainly family-owned. The dynamics of US agriculture, which are based on farmland use and performance of family-owned and corporate farms, gives us food for thought at a time when Europe is planning the future of the Common Agricultural Policy.
Farming income in France and the United States: structural increase in global US farming income, decreasing in France
Considering the diversity of agriculture in the US, determining a representative indicator for the average farming income per farm or per farmer does not make sense. In France, on the other hand, determining such an indicator is a relevant option given the homogeneity of farms, most of which are ‘farming-occupation medium sales farms’ or ‘large scale family-owned farms’ as defined by the nomenclature of US farming statistics.
It is nevertheless possible to compare the global income generated by agriculture in France and the United States.
Since the beginning of the 80s, US agriculture and French agriculture have been following two radically different routes. In the United States, global farming income is on the increase. The number of farms has stabilized, and as productivity goes on increasing so does global farming income.
In France, global farming income has been steadily decreasing over the last forty years. Increased productivity has failed to compensate for the ever smaller number of farms and the disparity in the cost of farm commodities vs. input. And so global farming income in France goes on decreasing.
1 Follow this link to read the entire article http://www.chambres-agriculture.fr/fileadmin/user_upload/Revue/Article/Revue1021/Revue1021_dossier.pdf