Giving a Beginner a Chance in the 2007 Farm Bill

Introduction

Addressing the challenges facing those who wish to become farmers and ranchers could not be timelier. In 1978, the United States had 350,000 farmers that were 34 years of age or younger. The USDA 2002 Census of Agriculture revealed, about 70,000 people 34 years of age or younger listing their primary occupation as farming. Less than one percent of America’s farmers are under 25 years of age, while nearly one-third are 65 or older. The fastest growing age cohort of farmers and ranchers are those 70 or older, the fastest declining is those 25 and younger. Such trends are not demographically sustainable. Traditional methods of farm and ranch entry and succession are no longer adequate to meet current challenges.

It is also essential to address the challenges facing mid-size farms and ranches. Mid-size farms are being squeezed nationwide, and recent USDA data show that these farms are quickly disappearing. In 1998, these farms represented over 28 percent of all farms in the nation, and three-quarters of the nation’s “working farms” – those farms where the chief source of income and the primary occupation is farming or ranching. By 2002, the number of mid-size farms had declined by 41 percent.

While declining, it is important to note that, nationally, mid-size farms and ranches continue to make up the largest share of “working farms” and continue to play a crucial role in many rural communities. They comprise the largest use of agricultural land and the number of people in mid-size farm and ranch families remains significant. The prosperity of midsize farms and ranches and how public policy influences their prosperity continues to be a critical variable to rural community success.

A significant challenge today is the escalating cost of land. According to the February 2005 edition of the Agriculture Newsletter published by the Federal Reserve Bank of Chicago, land values in Iowa, Illinois, Indiana, Michigan, and Wisconsin increased by an average of 12 percent in 2004, with some states seeing increases as high as 14 percent. Increases of that magnitude were last seen in 1988 and 1979.

The escalating value of land in the Midwest has, at least in part, been fueled by public policy and the federal system of farm program payments. Further, commodity crop production influenced by the federal system of farm program payments has been found to have negative economic and demographic impacts on rural areas. A study conducted by the Federal Reserve Bank of Kansas City found that federal agriculture programs “wed farming regions to an ongoing pattern of economic consolidation” and federal farm program payments appear to “create dependency on even more payments, not new engines of growth” as farm payments are linked to sub par economic and population growth.

However, opportunities in agriculture can be found elsewhere. Prospects for beginning and mid-size farms and ranches can be found in niche markets composed of consumers willing to pay premium prices for unique products and foods produced in ways they support. But broad-scale public policy that addresses the needs of beginning and mid-size farmers and ranchers to gain access to land and transition into high-value, niche markets lag far behind the demand.

This report examines a series of 2007 Farm Bill recommendations designed to address the challenges facing beginning and mid-size farmers and ranchers. We offer examples of how farmers and ranchers have responded to challenges present in 21st century agriculture and provide summaries discussing relevant issues taken from research previously published by others. Finally, this report forms a background of how these public policy recommendations would, if included in the 2007 Farm Bill, encourage a new generation of agriculturalists and ensure the future vitality of rural communities.


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