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3 Dimensions of Farm Complexity
Pages 71-82

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From page 71...
... It is worth keeping in mind, however, that some of the complexity that statistical agencies face when they collect data from complex farm operations is due to the types of demands placed on them to produce information about individuals, households, and families engaged in farming. The majority of agricultural commodities today are produced by farms that employ more complex business models (Gardner, 2002; Sumner, 2014)
From page 72...
... Limitations on gross income regularly feature in Farm Bill debates. As an example, current discussions are under way to limit crop insurance subsidies to those farms that have lower gross incomes.1 This has implications for the stability of the crop insurance markets, which certainly could be affected if larger farms were no longer eligible for subsidies and they chose not to participate in the market.
From page 73...
... discuss the complexities encountered in measuring the overall profitability of this total operation, in monitoring its machinery costs, in increasing the efficiency of transferring the assets of the original owners to the next generation, in monitoring family living expenditures, and in positioning the operation for growth. The main objectives in adopting the business and ownership structure depicted in Figure 3.1 were to facilitate the transfer of assets and to manage machinery costs.
From page 74...
... Reasons for the formation of the organizational structure included farm program payment limits and tax law advantages -- including both increased deductions and facilitation of the transfer of assets from one generation to the next. To obtain a measure of the overall profit of such a farm business, data must be accumulated from different entities, including the personal records from each participant and the C-corporations.
From page 75...
... in the sense that more of a single crop or livestock enterprise does not add to measurement complexity. Similarly, neither land nor even gross revenue is a particularly useful measure of farm business size when comparing farms that produce multiple commodities, because the mix of productive activities can be so different.
From page 76...
... If, over time, there is a transition from trucking as a typical farm activity to trucking as a separately owned and operated nonfarm business, complexities and ambiguities arise about where to draw the line between the farm and the trucking enterprise. As explored in the next chapter, collection of data about farm activities requires clarity about these definitional issues.
From page 77...
... However, to ensure that farm size and other indicators are accurate, it is also vital that such records be associated with the correct farm. 3.3.  BUSINESSES THAT OPERATE MULTIPLE FARMS OR OTHER BUSINESSES Some farm businesses encompass several operations that may each be properly considered separate farms, even if they are managed by a single entity.
From page 78...
... 3.4.  FARM-CONNECTED NONFARM OUTPUT The presence of farm-connected nonfarm inputs and outputs, together with the costs and revenues that they generate, adds to farm complexity. Nonfarm business activities are sometimes closely linked to a farm enterprise and, as discussed above, this arrangement complicates the question of where to draw the line between them, both for the business and for the data collector.
From page 79...
... For example, when seed cleaning is done by a business operated by a farm producer that also grows the seed crop, and no seeds from other farms are cleaned by the cleaning business, and the seed cleaning is physically located on property connected to the farm, then it may be correctly reported as a farm activity. This is so even though most farms ship seeds to businesses distinctly set up for cleaning.
From page 80...
... In other cases, operating a feed mill is distinctly a nonfarm activity and clear market prices are identifiable for milled feed. The Penobscot McCrum organization in Maine is an example of a complex farming operation (County Farms, Sunday River Farms)
From page 81...
... These include incentives to reduce tax liabilities, compliance with rules of government commodity subsidy programs, and incentives to reduce taxes or other concerns in transition of assets and business to new ownership (say, across generations)
From page 82...
... After that, it will be possible to provide guidance on the data collection infrastructure and on specific data collection instruments, such as the Census of Agriculture and the ARMS, which we undertake in Chapter 5. 4  major farm commodity producer in California recently reported that a Census of Agri A culture form mailed to his family home in the hills overlooking Los Angeles was tossed out as junk mail, whereas if it had been sent to the farm offices one of the accounting clerks would have duly completed as much as possible and submitted the forms.


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