The graying of the farm sector
February 14, 2012
Later this year the U.S. Department of Agriculture’s National Agricultural Statistics Service will undertake the 2012 Census of Agriculture, a project conducted every five years to bring factual context to the changes that are occurring in the U.S. farm sector. Given the high degree of volatility that has roiled the farming community in the past five years, many interesting data points should emerge meriting dissection and discussion. Few will be more important than the demographics of who is producing the raw materials that provide the foundation for the food and beverage industry’s finished products.
Much is being written about how to feed a rapidly expanding global population, but of equal importance, particularly in the United States, is who will produce the raw materials. The 2007 Census of Agriculture showed that the average age of principal farm operators in the United States was 57.1 years, and the fastest growing segment of principal operators comprised individuals 65 years and older.
The hurdles blocking new farmers from entering the business are as diverse as they are challenging. Business start-up costs and available land are just two. Strong farm income propelled farmland values to record highs at the start of 2012, according to the Federal Reserve System’s Agricultural Finance Databook. Cropland values across the corn belt and northern Plains soared to new peaks as many states posted annual value gains of between 20% and 40%.
Large-scale crop and livestock production units are unique enterprises compared with other businesses. Successful production is further specialized by region, whether it is the difference between growing durum wheat in the Upper Midwest or Southwest, or dairying in the moderate climate of California versus the harsher climate in Wisconsin. As producers who have achieved success in each of these regions and enterprises exit due to many factors, a knowledge gap develops that may prove difficult to fill, even with an active federal cooperative extension program.
Attracting younger people to farming is proving difficult. Despite the slow-growing economy combined with a high level of unemployment, many job openings in farming are unfilled. Compared to other businesses, farming is difficult on many fronts. The work itself is hard, and the business vulnerable to a range of disruptions such as the weather, pests or the volatility of markets.
The U.S. Department of Agriculture has set a goal to attract 100,000 new farmers within the next 10 years in an effort to replace those who have left or are leaving. On Jan. 20, the Farm Service Agency announced a new rule that expands loan opportunities for beginning farmers. The agency said the new rule provides additional flexibility by allowing loan officers to consider all prior farming experience, including on-the-job training and formal education.
But of equal importance to developing new farmers is establishing incentives for the type of agriculture they practice. In the same manner that going to work for a start-up venture in the technology sector is trendier than going to work for any of the more established firms, many farmers entering the business are focusing on organic and local food production and marketing ventures.
While these endeavors may be laudable and commercially viable on a small scale, what is really needed are more private and public incentives provided by the food and beverage industry and the U.S.D.A. The goal should be to educate entrants into farming about the benefits of new technologies, greater yields and increased economies of scale. Farm production in the United States steadily has expanded through the decades and efforts must be made now to ensure nothing slows future gains. While the focus for the most part is rightly centered on how to increase yields and productivity, it is equally important that those who will be farming in the future are also considered.