The Family Farm in a Flat The Family Farm in a Flat World: Implications for Farm World: Implications for Farm

Household Data CollectionHousehold Data CollectionMary Ahearn, Krijn Poppe, Cristina Salvioni, Koen Mary Ahearn, Krijn Poppe, Cristina Salvioni, Koen

Boone, and Aide RoestBoone, and Aide Roest

Presentation at FAO, Wye-Rome Meeting, Presentation at FAO, Wye-Rome Meeting, 11-12 June 200911-12 June 2009

Towards improvement in the Towards improvement in the HandbookHandbook

Development of an integrated Development of an integrated frameworkframework

Explicit recognition of changing Explicit recognition of changing structure and cross-country structure and cross-country differencesdifferences

Data implications of emerging issues Data implications of emerging issues

IntegrationIntegration

Firms and households are basic economic Firms and households are basic economic units and basic focus of economic analysisunits and basic focus of economic analysis

A flat world means these units are able to A flat world means these units are able to adjust rapidlyadjust rapidly

Current frameworks are frameworks for Current frameworks are frameworks for ways to develop indicators, not frameworks ways to develop indicators, not frameworks for for • how economic units behave and how economic units behave and • the implication of those behaviors for things the implication of those behaviors for things

societies care about: in our case rural societies care about: in our case rural development and agriculturedevelopment and agriculture

Go back a stepGo back a step

Once an integrated framework which Once an integrated framework which links agricultural and rural links agricultural and rural development to each other and the development to each other and the rest of the world…rest of the world…

Then the indicator frameworks can Then the indicator frameworks can followfollow

The integrated framework, if The integrated framework, if appropriately general, will provide the appropriately general, will provide the basis of future indicator developmentbasis of future indicator development

Turning to agricultureTurning to agriculture

Is it unique?Is it unique? Why is it unique?Why is it unique? Differences in structure across countries Differences in structure across countries

are large and therefore require are large and therefore require indicators that are disaggregatedindicators that are disaggregated• This was recognized in the This was recognized in the HandbookHandbook• But, was it recognized that the But, was it recognized that the

disaggregation should be based on a disaggregation should be based on a consistent structure? Why is that not consistent structure? Why is that not possible?possible?

Some RecommendationsSome Recommendations

Indicators of well-being should be Indicators of well-being should be accompanied by indicators of structureaccompanied by indicators of structure

The The HandbookHandbook should debate and should debate and recommend an inclusive definition of all recommend an inclusive definition of all farms farms

Focus on household indicators for family Focus on household indicators for family farms, but include indicators for nonfamily farms, but include indicators for nonfamily farms. What is a nonfamily farm?farms. What is a nonfamily farm?

Develop a data collection system that Develop a data collection system that allows for a continually changing farm and allows for a continually changing farm and household structurehousehold structure

US examples of the need to change approaches to US examples of the need to change approaches to respond to real world changesrespond to real world changes

Household incomeHousehold income ContractingContracting Corporate farmingCorporate farming

Compare this storyline on “Per Compare this storyline on “Per capita disposable personal capita disposable personal

income of farm and nonfarm income of farm and nonfarm residents, 1934-83” …residents, 1934-83” …

Source: USDA, ERS. Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1983. ECIFS3-3, Sept. 1984.

Compare this storyline on “Per Compare this storyline on “Per capita disposable personal capita disposable personal

income of farm and nonfarm income of farm and nonfarm residents, 1934-83” …residents, 1934-83” …

Source: USDA, ERS. Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1983. ECIFS3-3, Sept. 1984.

……to this storyline: “Average farm to this storyline: “Average farm operator household income by source operator household income by source

compared to all U.S. household compared to all U.S. household income, 1988-2009f”income, 1988-2009f”

                                                             d

Consideration of the Structure of Consideration of the Structure of farms: EU and USfarms: EU and US

Two dimensions of structure: size and off-Two dimensions of structure: size and off-farm workfarm work

Farm definitionFarm definition Size definitionSize definition

Compare the size distribution in 2007Compare the size distribution in 2007• Dynamics are missingDynamics are missing

Compare changes, 1997-2007Compare changes, 1997-2007 Compare off-farm work, 1987-1997-2007Compare off-farm work, 1987-1997-2007

Percent change in farms and hectares, 1997-2007

-35

-30

-25

-20

-15

-10

-5

0

5

10

Farms

Hectares

EU NL ITUS

Source: For EU, FFS. For US, ARMS.

Background to interpreting the comparative size distributions

0

10

20

30

40

50

60<

5

5-2

0

20

-50

50

-10

0

>1

00

<5

5-2

0

20

-50

50

-10

0

>1

00

1997

2007

Figure 1. Size distribution of holdings, U.S. and EU-15, 1997-2007(Size classes defined by hectares)

Sources: For U.S., ARMS. For EU, FFS.

Percent of holdings

U.S. EU

1012

18

2421 22

1716

34

26

5654

24

1311

22

5 63

5

0

10

20

30

40

50

60

705

-20

20

-50

50

-10

0

>1

00

5-2

0

20

-50

50

-10

0

>1

00

1997

2007

Figure 2. Size distribution of holdings, U.S. and EU-15, excluding small holdings, 1997-2007

(Size classes defined by hectares)

Source: For U.S., ARMS. For EU, FFS.

Percent of holdings

U.S. E.U.

20

27

55

26

48

1214

710

2319

38

25

18

30 28

0

10

20

30

40

50

60

70

80

90<

5

5-2

0

20

-50

50

-10

0

>1

00

<5

5-2

0

20

-50

50

-10

0

>1

00

1997

2007

Figure 3. Size distribution of holdings, Netherlands and Italy,1997-2007

(Size classes defined by hectares)

Source: FFS.

Percent of holdings

Netherlands Italy

3228

34

27

43

61 3

7673

18

41

14 12

1 1

12 12

2

0

10

20

30

40

50

60

70

80

905

-20

20

-50

50

-10

0

>1

00

5-2

0

20

-50

50

-10

0

>1

00

1997

2007

Figure 4. Size distribution of holdings, Netherlands and Italy, excluding small holdings, 1997-2007 (Size classes defined by hectares)

Source: FFS.

Percent of holdings

Netherlands Italy

50

20

40

60

9

17

14

76

45

17

46

5 6 3 3

0

10

20

30

40<

0

0 to

2

2 to

<4

4 to

<8

8 to

<1

6

16

to

<4

0

40

to

<1

00

>1

00

0 to

2

2 to

<4

4 to

<8

8 to

<1

6

16

to

<4

0

40

to

<1

00

>1

00

1997

2007

Figure 5. Size distribution of holdings, U.S. and EU-15, 1997-2007(Size classes defined by ESU)

Sources: For U.S., ARMS. For EU, FFS.

Percent of holdings

U.S. EU

27

34

19

8 8 7

11 11 9

31

24

7 76

9

7

10

171715

12 12

8

3

28

1613 13

9

5

0

10

20

30

404

to

<8

8 to

<1

6

16

to

<4

0

40

to

<1

00

>1

00

4 to

<8

8 to

<1

6

16

to

<4

0

40

to

<1

00

>1

00

1997

2007

Figure 6. Size distribution of holdings, U.S. and EU-15, excluding small holdings, 1997-2007

(Size classes defined by ESU)

Source: For U.S., ARMS. For EU, FFS.

Percent of holdings

U.S. E.U.

1719

30

23

15

6

9

15

23

20

2426

24

15

22

18

24

28

23

16

0

10

20

30

40

502

to

<4

4 to

<8

8 to

<1

6

16

to

<4

0

40

to

<1

00

>1

00

0 to

2

2 to

<4

4 to

<8

8 to

<1

6

16

to

<4

0

40

to

<1

00

>1

00

1997

2007

Figure 7. Size distribution of holdings, Netherlands and Italy,1997-2007

(Size classes defined by hectares)

Source: FFS. Note: No farms had <2 hectares in NL.

Percent of holdings

Netherlands Italy

46

1 1

91012 12

17 17

30

25

30

3534

1921

1417

9 11

710

35

1 2

0

10

20

30

40

504

to

<8

8 to

<1

6

16

to

<4

0

40

to

<1

00

>1

00

4 to

<8

8 to

<1

6

16

to

<4

0

40

to

<1

00

>1

00

1997

2007

Figure 8. Size distribution of holdings, Netherlands and Italy, excluding small holdings, 1997-2007 (Size classes defined by hectares)

Source: FFS.

Percent of holdings

Netherlands Italy

9 10

17

42

12 12

17

31

26

31

3639

2725

2021

710

35

0

10

20

30

40

50

60

70

80

U.S

.

EU

-15

Be

lgiu

m

De

nm

ark

Ge

rma

ny

Gre

ece

Sp

ain

Fra

nce

Ire

lan

d

Ita

ly

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xe

mb

ou

rg

Ne

the

rla

nd

s

Au

str

ia

Po

rtu

ga

l

Fin

lan

d

Sw

ed

en

Un

ited

Kin

gd

om

Figure 9. Share of farms engaged in pluriactivity, US and EU-15, 2007

Sources: For U.S., Census of Ag. For EU, FFS.

Percent

55

31

16

48 48

23

32

25

47

28

19

28

38

25

43

71

42

0

20

40

60

80

100C

on

tra

ctin

g

Fu

ll o

wn

er

Hire

lab

or

D/A

ra

tio>

10

%

Sp

ecia

lize

d

<100 ESUs

=>100 ESUs

Figure 10. Structural characteristics by farm size, U.S., 2007

Source: 2007 ARMS.

Percent of farms

6

48

70

23 26

79

16

4854

92

Farms with =>100 ESU’s are 10% of farms, 45% of hectares, and 81% of production.

0

10

20

30L

an

dsca

pe

co

nse

rva

tion

Ag

rito

urism

Org

an

icp

rod

uctio

n

CS

A

Va

lue

-ad

de

d

Dire

ct sa

les

Win

d a

nd

So

lar

<100 ESUs

=>100 ESUs

Figure 11. Multifunctionality activities by farm size, U.S., 2007

Source: 2007 ARMS.

Percent of farms

15

24

2 2 21 <1 1

23

64

12

Farms with =>100 ESU’s are 10% of farms, 45% of hectares, and 81% of production.

Emerging issuesEmerging issues Accountability—new policy environmentAccountability—new policy environment Most critical issues extend beyond ag Most critical issues extend beyond ag

and rural areas—underscores the need and rural areas—underscores the need for an integrated frameworkfor an integrated framework

Farm household issues: Measuring size Farm household issues: Measuring size (SO), Dynamics, Data collection from (SO), Dynamics, Data collection from very large operations, Nontraditional very large operations, Nontraditional business and production practices, business and production practices, Multifunctionality activities. MF varies Multifunctionality activities. MF varies by farm size.by farm size.