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Historic, Archive Document Do not assume content reflects current scientific knowledge, policies, or practices. ws I ain - - on Nyi g. ’ cael ee a ate, se a 7 eal" ve : K . rea 7 ‘ age Reservé aHD1761 HENRYA . WALLACE INSTITUTE .F67 i __ 1997 r Ce FOR ALTERNATIVE AGRICULTURE : os 9200 EDMONSTON RD_ STE 117 GREENBELT MD 20770-1551 United States Department of Agriculture National Agricultural Library FORCES SHAPING U.S. AGRICULTURE: A BRIEFING Book Table o f Contents errs Me ee kN A ene at ing... Qane es ae AOe ME 2 eum ume UUM Cwrat)C MI UNd IZEGONMOMY ines steel os cee ck cc debs on cde sRbed cescece tee eh ec ce ten e ee atic al 3 ee ULM ec MOU CAs Ms, 5 aR oFe ic als deeininebs tA Pe uliCagogk tic coc Le Pechnainaete den eas aitiheneee yee 14 ieee hanging#Amertcan Diet: Trends and Issues. .i.....5.82s6. 2e.e. ...I.R .. 25 SUM RIsCS OUT Ge sano Lie. ELVITOMIMENL -.. icasccssucssscotcesccecccsbscetee'ceacscdvoicneeepeudetcstueee e e3 ) Poagenucaianesearch, Productivity, and Technical Change.......cssccicssieealdeaesn setreesst s 65 oS AGver) llias y ge sep lMA VCoyat sb all t: Ce |< ieeeO P one ero Shina l U.S.D.A., NAL a SEP aune 20tp CG On tenet Dust sonr 's |CATALOGING PREP This publication was designed and edited by ERS economist Todd Morath, based on briefings presented to USDA policymakers and senior management by Tom Carlin (farm structure and rural economy), Joy Harwood (U.S. agricultural policy); Dave Smallwood (the U.S. consumer), John Reilly (natural resources and environment, and agricultural research and technical change), and Nicole Ballenger (U.S. agricultural trade). Jane Allhouse, John Dunmore, Betsy Frazao, Lin Hoffman, Stephanie Mercier, Tim Osborn, and Judy Putnam made major contributions to developing the briefings. Many other ERS economists provided charts and data, and reviews and comments. FOREWORD SDA’‘s Economic Research demand and the means by which protecting and conserving natural Service welcomes the confer these preferences are revealed (or not) resources? Will new international ees gathered in California for in global trading. Transboundary trading arrangements promote market the 23rd meeting of the International environmental issues are increasingly access and Stability? How will the Association of Agricultural Econo- part of international political dialogue, role of governments change? How mists. This briefing book provides an and economists can help inform de- can the goal of global food security be overview of trends and conditions in bate about appropriate policy inter- assured in new circumstances? The the American food and agricultural vention. meeting in Sacramento provides an sector, recognizing linkages and inter- important opportunity for discussing dependencies with nations across the We enter the next century with a the contributions our profession can globe. Viewed as an agenda for body of resilient and adaptable eco- make toward informing public and disciplinary research, the topics cov- nomic theory that has evolved over private decisionmaking. I/t is our hope ered in the book clearly transcend the some 250 years. As applied econo- that this briefing book contributes to traditional boundaries of “agricultural” mists, we will be among the first to the richness of that dialogue. economics. Farm level production know whether it also provides an issues remain of paramount impor- analytical framework for understand- tance in assessing food supply re- ing the challenges ahead. As the sponse, of course, but changing material in this book aptly demon- Susan Offutt, Administrator population demographics and market strates, there will be no shortage of Economic Research Service arrangements require analyses that questions to be answered. Will the U.S. Department of Agriculture probe complex determinants of food world be able to feed itself while July 1997 arm Hei perssa re aed to continue declining PatequotTE oes esis that of all U.S. households. percent a year ‘for the.r est af Fatm households, on average, depend economy Warm anye ae areas. The the decade, reaching i.6 to.a 7. mil- more on; income eel oft-farm extractive value of natural resources lion by the year 2000. Arr:i ncreasing segeyyrées than fr is being eclipsed, by the amenity share of U.S. food and fiber1 BSe ast a value. Rural aréas are increasingly viewed as desirable places in which to recreate, Jetire, and reside. portunities in rural areas, and readily available higher paying jobs in urban Farm Size Increased From 1930 to 1992 areas led to major migration of hired workers, sharecroppers, tenants, and As Farm Numbers Declined From Their 1935 Peak operators of small marginal farms to Number of farms (in millions) Acres per farm urban America. Fewer farm youth 600 entered farming resulting in an aging Acres pe‘r Nfaerm of the farm operator population. e The “seeds” of the “rural turn- around” that occurred in the 1970s were actually sown during the 1950s as manufacturing firms began to shift production facilities out of urban areas. While rural nonfarm jobs were expanding, this job growth was insuf- ficient to absorb workers leaving farming. : 7 . 100 1930 1935 1940 1945 1950 1954 1959 1964 1969° 919/745) 197658 1982 t987" 1992 e Expanding rural nonfarm job Census Year opportunities gained steam during the 1960s and 1970s mitigating the out Prepared by the Rural Economy Division, Economic Research Service, USDA, migration by facilitating part time using Census of Agriculture farming. Off-farm income eventually contributed to narrowing the income Farm Numbers Will Continue gap between farm and nonfarm e Farm numbers declined the households. Strong entry of young to Decline fastest during the 1950s and early farmers during the boom years of the e Farm numbers have declined 1960s. Mechanization allowed for late 1970s stabilized farm numbers from the high of 6.5 million in 1935 the substitution of capital for labor, for a short time, but lower entry since to about 2 million today. Fewer improving labor productivity and the 1980s farm crisis continued the farms implies larger farms since land favoring farm consolidation to achieve decline. in farms has remained near 1 billion lower per unit production costs. Low acres over the period. farm incomes, few nonfarm job op- a Farm numbers are expected to decline by about 2 percent or less a7, Farm Structure & Rurai Economy annually for the rest of decade, reach- percent of all sales came from 2.2 into the 21st century. Large commer- ing 1.6 to 1.7 million by 2000. The — percent of farms. These large com- cial farms are expected to increase in decline in farm numbers is not a mercial farms have annual sales of number and will likely be 3.5 percent threat to the Nation's food supply. $500,000 or more. [Source: 1993 of all farms by the end of the decade. Labor productivity on farms continues USDA Farm Costs and Returns Sur- The number of small commercial to Increase. Younger farmers gener- vey] farms is expected to decline. Still, ally operate larger and more efficient the farm sector is much less concen- farms than do older farmers whom ° The trend towards increasing trated than are other sectors of the they replace. Thus, fewer farmers concentration of production among U.S. economy. can continue to produce the Nation’s — fewer farms is expected to continue food and fiber. Most Food and Fiber Comes Fewer Farms Will Produce From Relatively Few Farms Most Food and Fiber ner 100 e An increasing share of U.S. food and fiber IS being produced on Noncommercial - Less than $50,000 in farm sales Small commercial - $50,000 to $99,999 in farm sale fewer and fewer farms. In 1940, eitcomares bee $499,999 taneaee 11.6 percent of all farms (689 thou- Large commercial - $500,000 or more in farm sales sand) accounted for one-half of all sales of agricultural commodities from U.S. farms. By 1992, the proportion had dropped to 3.2 percent (62 thou- sand farms). [Source: Census of Agriculture] e A recent profile of U.S. farms Non. Com. shows that 73 percent of all farms reported sales of less than $50,:0 00. El] Farms Wl Sales These non-commercial farms con- trolled 33 percent of all acres oper- Prepabyrt heed Ru ral Economy Division, ated and 10 percent of total farm uEscionngo m1i9c9 3 ReFasrema rcCho sStesrv aincde , ReUtSuDrAn,s Survey sales. In sharp contrast, about 39.6 Large Commercial Farms Expected to Increase Percent of Farms 100 Prepared by the Rural Economy Division, Economic Research Service, USDA —6= Farm Structure & Rural_Economy