Mary Clare Ahearn

The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators

With the 1996 Farm Act, the United States introduced payments that were designed to be “decoupled.” Labor allocation choices are likely to be affected by receipt of payments, and income from off-farm jobs has been the major source of income for most farm households for sometime. This article examines whether the 1996 change has affected the off-farm labor participation of farm households. We conclude that the observed increase in off-farm participation of farm operators who received payments was not the result of the 1996 policy change. Government payments, whether coupled or decoupled, have a negative effect on off-farm labor participation. Copyright 2006, Oxford University Press.

Contracts, Markets, and Prices: Organizing the Production and Use of Agricultural Commodities

Production and marketing contracts govern 36 percent of the value of U.S. agricultural production, up from 12 percent in 1969. Contracts are now the primary method of handling sales of many livestock commodities, including milk, hogs, and broilers, and of major crops such as sugar beets, fruit, and processing tomatoes. Use of contracts is closely related to farm size; farms with

The Distribution of Income and Wealth of Farm Operator Households

1 million or more in sales have nearly half their production under contract. For producers, contracting can reduce income risks of price and production variability, ensure market access, and provide higher returns for differentiated farm products. For processors and other buyers, vertical coordination through contracting is a way to ensure the flow of products and to obtain differentiated products, ensure traceability for health concerns, and guarantee certain methods of production. The traditional spot market-though it still governs nearly 60 percent of the value of agricultural production- has difficulty providing accurate price signals for products geared to new consumer demands (such as produce raised and certified as organic or identity-preserved crops modified for special attributes). We are likely to see a continuing shift to more explicit forms of vertical coordination, through contracts and processor ownership, as a means to ensure more consistent product quantity and quality.

Beginning Farmers and Ranchers

Because of the relatively low incomes of people associated with farming in the past, income maintenance has been a major focus of farm policy. The average money income of families earning farm self-employment income in 1983 was 93% of the average money income of other U.S. families (USDC). However, an average income of farm households has lost much of its meaning because it masks a great deal of variation. Compared to the past, farm households represent a heterogenous population, presenting a new challenge to policy makers concerned about framing income maintenance policies. The current farm bill debate began in 1984 amidst piecemeal information on increased bankruptcies and general financial stress of farms. Analysis of the financial leverage and cash flow positions of farm businesses has since been forthcoming (Johnson, Baum, and Prescott). However, information on the financial well-being of those households associated with farming has remained limited. The purpose of this paper is to describe the financial well-being of farm operator households by measuring their size distribution of personal income and farm equity in 1984. The contribution of each source of income to the total inequality of incomes is also analyzed.

Government policies and farm size: does the size concept matter?

USDA defines beginning farmers and ranchers as those who have operated a farm or ranch for 10 years or less either as a sole operator or with others who have operated a farm or ranch for 10 years or less. Beginning farmers tend to be younger than established farmers and to operate smaller farms or ranches, some of which may provide no annual production. Beginning farmers often face obstacles getting started, including high startup costs and limited availability of land. USDA—through the Farm Service Agency and the Natural Resources Conservation Service—provides loans and conservation assistance to beginning farmers and ranchers. This report draws on data from annual surveys and the Census of Agriculture to provide policymakers with a better understanding of beginning farmers and ranchers, including how they contribute to U.S. agricultural production.

Linkages Between Community-Focused Agriculture, Farm Sales, and Regional Growth

This paper employs a panel data set of 48 states from 1960 to 1996 to investigate the relationships of government policies (public agricultural research and development (R&D), extension, and government commodity program payments) to changes in farm size. Five different farm size measures are considered (acres operated per farm, real land and building value per farm, real cash receipts per farm, real cash receipts plus government payments per farm, and an imputed measure of the real capital service flow per farm) in order to make a more general statement about the impacts of government policies on farm size. It was found that the impacts of government policies on farm size are in general robust to the measure of farm size considered. More specifically, it was found that R&D, extension, and government payments all have positive effects on farm size.

Direct-to-Consumer Sales of Farm Products: Producers and Supply Chains in the Southeast

Community-focused agriculture has been heralded as a development strategy to induce local economic growth. This study examines county-level linkages between community-focused agriculture and growth in total agricultural sales and economic growth more broadly. Using Census of Agriculture data, regional growth models are estimated on real personal income per capita change between 2002 and 2007. We find no association between community-focused agriculture and growth in total agricultural sales at the national level, but do in some regions of the United States. A

Usefulness and Limitations of COP Estimates for Evaluating International Competitiveness: A Comparison of Canadian and U.S. Wheat

1 increase in farm sales led to an annualized increase of

Organizational Economics in Agriculture Policy Analysis

0.04 in county personal income. With few exceptions, community-focused agriculture did not make significant contributions to economic growth in the time period analyzed.

Doing Good by Choosing Well: Priorities for Agricultural Economics

Given the geography and agroclimatic conditions of the Southeast, coupled with continued population expansion from in-migration, local foods markets may be a promising niche market for some farms in the region. The Southeast has more small farms than any other U.S. region. Using farm-level data, we address the question of how successful southeastern farms engaged in direct sales to consumers differ from other farms. We also include a case study of a marketing association in the panhandle of Florida. In both analyses, we focus on the role of the supply chain for direct sales in explaining farm returns.