The Family Farm in a Flat World: Implications for Farm Household Data Collection

1. The Family Farm in a Flat World: Implications for Farm Household Data Collection Mary Ahearn, Krijn Poppe, Cristina Salvioni, Koen Boone, and Aide Roest Presentation at FAO, Wye-Rome Meeting, 11-12 June 2009

2. Towards improvement in the Handbook • Development of an integrated framework • Explicit recognition of changing structure and cross-country differences • Data implications of emerging issues

3. Integration • Firms and households are basic economic units and basic focus of economic analysis • A flat world means these units are able to adjust rapidly • Current frameworks are frameworks for ways to develop indicators, not frameworks for • how economic units behave and • the implication of those behaviors for things societies care about: in our case rural development and agriculture

4. Go back a step • Once an integrated framework which links agricultural and rural development to each other and the rest of the world… • Then the indicator frameworks can follow • The integrated framework, if appropriately general, will provide the basis of future indicator development

5. Turning to agriculture • Is it unique? • Why is it unique? • Differences in structure across countries are large and therefore require indicators that are disaggregated • This was recognized in the Handbook • But, was it recognized that the disaggregation should be based on a consistent structure? Why is that not possible?

6. Some Recommendations • Indicators of well-being should be accompanied by indicators of structure • The Handbook should debate and recommend an inclusive definition of all farms • Focus on household indicators for family farms, but include indicators for nonfamily farms. What is a nonfamily farm? • Develop a data collection system that allows for a continually changing farm and household structure

7. US examples of the need to change approaches to respond to real world changes • Household income • Contracting • Corporate farming

8. Compare this storyline on “Per capita disposable personal income of farm and nonfarm residents, 1934-83” … Source: USDA, ERS. Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1983. ECIFS3-3, Sept. 1984.

9. Compare this storyline on “Per capita disposable personal income of farm and nonfarm residents, 1934-83” … Source: USDA, ERS. Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1983. ECIFS3-3, Sept. 1984.

10. …to this storyline: “Average farm operator household income by source compared to all U.S. household income, 1988-2009f” d

11. Consideration of the Structure of farms: EU and US • Two dimensions of structure: size and off-farm work • Farm definition • Size definition • Compare the size distribution in 2007 • Dynamics are missing • Compare changes, 1997-2007 • Compare off-farm work, 1987-1997-2007

12. Background to interpreting the comparative size distributions US EU NL IT Source: For EU, FFS. For US, ARMS.

13. Figure 1. Size distribution of holdings, U.S. and EU-15, 1997-2007 (Size classes defined by hectares) Percent of holdings 56 54 34 26 24 24 22 22 21 18 17 16 13 12 11 10 6 5 5 3 EU U.S. Sources: For U.S., ARMS. For EU, FFS.

14. Figure 2. Size distribution of holdings, U.S. and EU-15, excluding small holdings, 1997-2007 (Size classes defined by hectares) Percent of holdings 55 48 38 30 28 27 26 25 23 20 19 18 14 12 10 7 E.U. U.S. Source: For U.S., ARMS. For EU, FFS.

15. Figure 3. Size distribution of holdings, Netherlands and Italy, 1997-2007 (Size classes defined by hectares) Percent of holdings 76 73 43 34 32 28 27 18 14 12 12 12 6 4 3 2 1 1 1 1 Italy Netherlands Source: FFS.

16. Figure 4. Size distribution of holdings, Netherlands and Italy, excluding small holdings, 1997-2007 (Size classes defined by hectares) Percent of holdings 76 60 50 46 45 40 20 17 17 9 6 5 4 3 3 1 Italy Netherlands Source: FFS.

17. Figure 5. Size distribution of holdings, U.S. and EU-15, 1997-2007 (Size classes defined by ESU) Percent of holdings 34 31 28 27 24 19 17 17 16 15 13 13 12 12 11 11 9 9 9 10 8 8 8 7 7 7 7 6 5 3 EU U.S. Sources: For U.S., ARMS. For EU, FFS.

18. Figure 6. Size distribution of holdings, U.S. and EU-15, excluding small holdings, 1997-2007 (Size classes defined by ESU) Percent of holdings 30 28 26 24 24 24 23 23 23 22 20 19 18 17 16 15 15 15 9 6 E.U. U.S. Source: For U.S., ARMS. For EU, FFS.

19. Figure 7. Size distribution of holdings, Netherlands and Italy, 1997-2007 (Size classes defined by hectares) Percent of holdings 46 35 34 30 30 25 21 19 17 17 17 14 12 12 11 10 10 9 9 7 5 3 2 1 1 1 Italy Netherlands Source: FFS. Note: No farms had <2 hectares in NL.

20. Figure 8. Size distribution of holdings, Netherlands and Italy, excluding small holdings, 1997-2007 (Size classes defined by hectares) Percent of holdings 42 39 36 31 31 27 26 25 21 20 17 17 12 12 10 10 9 7 5 3 Italy Netherlands Source: FFS.

21. Figure 9. Share of farms engaged in pluriactivity, US and EU-15, 2007 Percent 71 55 48 48 47 43 42 38 32 31 28 28 25 25 23 19 16 Sources: For U.S., Census of Ag. For EU, FFS.

22. Figure 10. Structural characteristics by farm size, U.S., 2007 Farms with =>100 ESU’s are 10% of farms, 45% of hectares, and 81% of production. Percent of farms 92 79 70 54 48 48 26 23 16 6 Source: 2007 ARMS.

23. Figure 11. Multifunctionality activities by farm size, U.S., 2007 Farms with =>100 ESU’s are 10% of farms, 45% of hectares, and 81% of production. Percent of farms 24 15 6 4 3 2 2 2 2 2 1 1 1 <1 Source: 2007 ARMS.

24. Emerging issues • Accountability—new policy environment • Most critical issues extend beyond ag and rural areas—underscores the need for an integrated framework • Farm household issues: Measuring size (SO), Dynamics, Data collection from very large operations, Nontraditional business and production practices, Multifunctionality activities. MF varies by farm size.