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The rooster is crowing. You glance outside your window to see a magnificent sunrise bathing your field of wheat in glorious golden light. As you get dressed, you make a mental note of the chores that need to be done before lunch. How great it is to be away from the hustle and bustle of the city! But then you remember your scheduled post-lunch meeting with a corporate farm representative. Truth is, you and your family are just one bad season away from total and utter bankruptcy. It might be time to sell this small family farm.
Small family farms make up a large percentage of the farmland in the United States and abroad, but all around the world, larger farms are outproducing them. Small family farms are gradually disappearing as our food industry demands increased productivity and efficiency—but are there any benefits to keeping the little farms around? Read on to find out.
In the United States, farm sizes are categorized by the US Department of Agriculture (USDA).
A small family farm is a farm that is owned and operated by a family and grosses less than $350,000 per year.
Small family farms can be either commercial farms or non-commercial farms. A small commercial family farm is designed to generate an income to either wholly or partially support the family who owns it. As we mentioned, this tops out at $350,000 per year. After that, it is considered a midsize family farm; beyond that is the large family farm, which generates more than $1,000,000 per year.
A commercial farm that grosses less than $150,000 per year is considered a low-sales farm. Many small commercial family farms may generate as little as $1000 a year.
Non-commercial family farms are specifically meant to provide subsistence for a family, not generate income. Most of the products grown, produced, and harvested on the farm are consumed by the farmers themselves. While these farmers may sell (or share) their surplus, these farms primarily exist to feed and clothe a family, not make money.
Many small family farmers may be employed in another full-time or part-time job.
There are around 2 million farms in the United States, and family farms still make up about 98% of all of these farms. Small family farms make up about 89% of all farms and account for about 20% of all agricultural production in the US.
Not all countries define "small family farm" the same way the US does. Many organizations, including the United Nations Food and Agriculture Organization (UNFAO), differentiate farms based on size alone, rather than ownership and gross income. Therefore, in the wider global lexicon, "small family farm" and "smallholdings farm" are often used synonymously.
Smallholdings farm: A farm that is less than two hectares (∼five acres) in size, typically operated by a family.
There are around 570 million farms around the world. Around 84% of these farms are considered smallholdings, and they generate about a third of the world's food.
Family-owned farms of any size produce about 80% of the world's food.
The main difference between a small family farm and a corporate farm is ownership.
A corporate farm is a farm that is owned and operated by a non-family-run business.
As we mentioned earlier, family farms can be quite large—but corporate farms are almost always large. This is due to the economic concept of economies of scale: businesses usually become more profitable the larger they become.
Farmer Bill runs a small five-acre commercial family farm. He can grow about 110 potatoes a season. Based on his overhead costs, he realizes that he has to sell the potatoes for about $5 each to recoup his investment. The price is not competitive and there is almost no gross profit.
Corporate CEO Cindy manages a 150,000-acre corporate farm. Her farm can grow over 3,000,000 potatoes per season. Even if she sold the potatoes for a mere 50₵ each, her company would easily generate enough income to recoup initial investments, pay employees, and generate profits to make shareholders happy.
Additionally, corporate farms are always designed to generate a profit for the corporations that own them. There is simply no such thing as a subsistence-based (non-commercial) corporate farm!
Small community farms have become more popular in urban and suburban settings. Community farms are neither family farms nor corporate farms and are subsistence-based. On a community farm, the soil is shared by a community. The various crops may also be owned collectively or may be owned by individuals in the community.
Agricultural practices are typically shaped by economic forces.
Because large-scale family farms and corporate farms are both designed to maximize profit, they often adopt the same farming techniques and may be indistinguishable except by ownership. Farming at this scale is sometimes called industrial farming or industrial-scale farming.
The goal of industrial farming is to maximize efficiency. Remember the statistic we mentioned earlier? Small family farms comprise around 89% of all farms in the United States but only account for about 20% of agricultural production. Industrial farms always strive to produce as much food as possible relative to the available land; greater food or fiber production equals more profit. Governments often encourage or subsidize this behavior because it ensures greater food stability nationally.
As industrial farms expand, the availability of farmland and other essential farm resources becomes depleted. Many small family farms are simply priced out of existence. Buying or maintaining your own plot of land becomes prohibitively expensive, and thanks to economies of scale, competing against an industrial farm becomes a monumental challenge.
As our population increases, the world is becoming more dependent upon the food supply generated by both family-owned and corporate industrial farms.
Not all farmers are motivated by profit. Farmer Bill, from the earlier example, may be happy with his small family farm and may not necessarily upgrade to a larger one if offered. The divide between small family farms and industrial farms is not just a monetary one, but also a cultural one: a desire for community, a feeling of closeness to the land, a particular rural lifestyle, a sense of ownership and independence, and/or the preservation of traditions.
These abstract concepts can theoretically have profound effects on the well-being of a society—but they do nothing to address the very real fact that large industrial farms typically produce more food at a more cost-effective rate than most small family farms. So what are the tangible benefits of small family farms?
Industrial farms may focus on just one or two commercially-popular crops, like corn and soy. This specialization over a large area can actually leave crops more vulnerable to disease, pests, or natural disasters and can wear out the soil more quickly.
To enable specialization, farmers (of all types) may turn to pesticides and fertilizers. Sometimes these products have unexpected consequences. Many pesticides can pollute waterways and harm local wildlife and people.
Virtually all farmers practice methods like crop rotation (to keep the soil healthy) and mixed cropping (to slow down the spread of disease and pests). However, small family farms are naturally more dependent on these techniques because they have less money to spend on pesticides and fertilizers. This, ironically, often makes them less vulnerable to disease.
Additionally, small family farms may grow local fruit and vegetable varieties that are immune to diseases common to the more widely-grown commercial crops.
To maximize profits, industrial farms may force animals into cramped living conditions and inject them with hormones that cause huge growth at a rapid rate. An animal may spend its entire life in a cramped stall or cage and eat only processed food or cheap hay. Industrial livestock farms enable mass meat production, but these living conditions are not always sanitary. Even overlooking potential concerns about animal welfare, industrial livestock farms can enable the spread of disease and pollution.
As with the above, better living conditions for livestock often coincides with a decrease in diseases, making meat safer for human consumption. Small family farms that specialize in livestock often have a greater ratio of land to animals and fewer animals overall, reducing pollution caused by mass feces, flatulence, and belching.
Revenue from a corporate farm does not usually stay local. Besides providing employment to a few people to manage the farm, a community may not greatly benefit economically from the presence of a corporate farm.
The income from a small family farm is likely to circulate locally. These farmers may sell their produce, meat, or fiber to a local grocery store, or directly to customers at a community farmer's market or from their own farm store. The revenue generated is then likely to be spent at local businesses, generating wealth in the local economy.
Small family farms may cultivate crops or livestock that are overlooked or deemed unprofitable by industrial farms. More on that below.
Farmer Bill's choice to be a commercial potato farmer didn't pan out very well, did it? That's because there are only so many potatoes you can grow on five acres.
Although the USDA links family farms to gross income rather than spatial size, there is something of a correlation: income is typically limited by the amount of space you have to grow crops or raise livestock. For this reason, small family farmers may choose to invest in agricultural products that do better with more limited space.
Livestock such as poultry can still be profitable on small family farms due to the relatively little space they take up compared to cattle or sheep. Densely-grown crops like wheat can also be profitable on small family farms.
However, some small family farmers may specialize in crops that do better on small farms than they do on large farms, either because they are more manageable in small spaces or because it may be prohibitively expensive to grow them en masse. Examples include unique types of fruits and vegetables; Christmas trees; mushrooms; flowers; herbs; small fruits; and bamboo.
Agricultural tourism, or agritourism, is the monetization of a farm tour or visit. Agritourism can provide a major source of revenue for small family farms.
Livestock like horses, llamas, alpacas, goats, and sheep are major attractions for agritourists. In fact, for some small farms, it actually may be more profitable to allow tourists to interact with farm animals than it is to sell the animals' meat or fiber!
Other small family farms may invite tourists to come pick their own food. This is especially common with small berries, like blueberries and blackberries, as well as pumpkins in fall.
In the United States, a small family farm is a farm that is owned and operated by a family and grosses less than $350,000 per year.
Non-commercial small family farms are designed just to meet the needs of one family. In order for commercial small family farms to work, they may need to sell locally, prioritize agritourism, or cultivate products appropriate for their scale.
Small family farms often sell their products locally. The money they make from their products often recirculates into the same community.
Small family farms typically do not have the resources necessary to outcompete large farms from a purely financial standpoint.
Small family farms make up about 89% of all farms in the United States.
Who categorizes farm sizes in the United States?
The United States Department of Agriculture (USDA)
Which of the following best characterize a small family farm in the United States?
Grosses less than $350,000 per year
True or False: Not all small family farms are designed to generate a monetary income.
True! Some small family farms are non-commercial or subsistence farms; farmers cultivate agricultural products that are meant to be consumed by their own families.
The United States has approximately how many farms?
In the United States, what percent of farms are small family farms?
Around 89% of farms in the United States are small family farms.
What is the main difference between a large family farm and a corporate farm?
Ownership. A large family farm is owned by a family or family-run business. A corporate farm is owned by a non-family-run business.
Explain how economies of scale impact agriculture.
Larger farms can benefit from growing/raising more products at once and so can afford to sell them more cheaply, allowing them to easily outcompete small family farms in terms of price.
Which of the following is NOT a benefit of a small family farm?
May produce products overlooked or rejected by larger farms
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