Improving Data Collection and Measurement of Complex Farms (2019) / Chapter Skim
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4 Conceptual Issues: Defining Farming, Farms, Farmers, and Agriculture
4 Conceptual Issues: Defining Farming, Farms, Farmers, and Agriculture
Pages 83-114
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From page 83... ...
In the contemporary economy, however, this heuristic of the farm has become outdated as more complex organizational forms have emerged and become commonplace. For example, some traditional farming activities, like harvesting crops, are now often carried out by hiring specialized companies or using workers who are employed not by the farm but 83
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From page 84... ...
1 describes agriculture (an imperfect synonym of farming) as follows: "Agricultural activity is the management by an entity of the biological transformation and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets" (International Financial Reporting Standards Foundation, 2017)
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From page 85... ...
Agricultural production includes establish ments performing the complete farm or ranch operation, such as farm owner-operators and tenant farm operators. Agricultural support activi ties include establishments that perform one or more activities associated with farm operation, such as soil preparation, planting, harvesting, and management, on a contract or fee basis.
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From page 86... ...
are farming activities. Codes 1151 and 1152 include support activities for agriculture, covering the important set of nonfarm businesses that serve as potential substitutes for direct management and operation of production activities by farmers.
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From page 87... ...
Examples include petting farms, dude ranches, or farms offering yoga with goats. Although these operations may have been conventional farms in the past, focused strictly on crop or livestock production, they do not necessarily fit farm definitions any longer, even if their animals are registered for animal health reasons.
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From page 88... ...
Another example of agricultural-related activities that has posed problems for classification purposes is the making of wine and cheese. Are the biological processes in cheese making and wine making characteristic enough to call them farming activities instead of industrial activities?
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From page 89... ...
Conceptualizing farming activities in this way does not imply a change in data collection by NASS and ERS, but it may help both agencies clarify and separate discussions about complex farms as businesses (farms) , locations (farms, fields)
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From page 90... ...
Examining the Principal Activities of a Farm Business More importantly, the organizational forms that farming activities can take create definitional problems. Statistical agencies that count and describe farms must classify organizations instead of activities; businesses receive a census form and report multiple activities whose operating costs often cannot be disentangled.
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From page 91... ...
. Adoption of such a method would bring agricultural statistics in line with statistics covering other sectors of the economy, which the panel finds to be an important consideration guiding decisions on the agricultural statistical framework.
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From page 92... ...
There are good reasons to try to survey agricultural production that takes place within these companies, especially if a large share of the production takes place in them. This may be appropriate because, among other reasons, such mixed production businesses are affected by agricultural policies (see Chapter 2)
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From page 93... ...
16 For the USDA/ERS Glossary, see https://www.ers.usda.gov/topics/farm-economy/farmhousehold-well-being/glossary, which covers the following terms: farm; farm operator and principal farm operator; family farm; farm operator household; farm operator household income; farm operator household wealth; farm typology; commodity specialization; disposable personal income of farm and nonfarm residents.
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From page 94... ...
The majority of farms, especially the smaller ones, have a simple structure and will report their current operations as establishments, resulting in the same number of farms. For complex farms, it is currently unclear whether they would report one of their establishments or report a complex farm corresponding to a statistical enterprise.
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From page 95... ...
The farmer who buys out a neighbor, adds that land to his own property, and then rents out the purchased farm building or uses it for his contract work operations or for an agritourism business is enlarging his establishment.
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From page 96... ...
Where the farm business's establishment and legal entity structures align, opportunities for exploiting linkages with administrative (e.g., tax) data will exist.
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From page 97... ...
This includes both cases in which one business owns and operates one establishment (a simple farm business) and cases in which one business owns and operates a group of establishments (a complex farm business)
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From page 98... ...
For subsistence farms in developing countries, the answer is "no," but in developed countries it is unusual to include hobbyactivities for leisure, like gardening or unpaid housekeeping work, in official economic statistics. From an agricultural policy perspective, activities that are outside markets and not sensitive to agricultural policies are also not very interesting, even if some types of registration can be useful, such as registering all horses in a country for animal health reasons.
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From page 99... ...
." The Oxford English Dictionary defines farmers as persons "who own or manage farms." Owners or Managers? The Oxford English Dictionary definition exposes a quandary for statisticians: Are farmers owners or managers?
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From page 100... ...
, respondents may list multiple men and women who have been engaged in making decisions for the operation; they are then asked to 19 See Publication of Agriculture Census Data on Farm Operator Demographics, a report by the National Institute of Statistical Sciences Technical Expert Panel, October 12, 2017. There it was recommended to replace the label "Operator" with "Producer" in all publications.
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From page 101... ...
This raises the question whether or not a single person can be designated as most important in operating the farm or in share of ownership. In larger, more complex farm businesses it can be difficult to rank the "most important manager" as more or less important than the most important owner.
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From page 102... ...
On very large farms and in complex farm businesses, the family dimensions are relatively less important to the functioning and stability of the operation. Such organizations are more like big family firms in other sectors: it is hard to imagine that family income from other sources plays as big a role in the investment decisions made by Walmart as it does in decisions made by small retail businesses.
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From page 103... ...
point out that the concept of the family farm was originally used for homesteading farms, which had no outside labor or capital nor used contractors, and over time it was broadened to keep up with changes in the organization of farming. The interest in family farms and farm households raises the question of how to define them.
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From page 104... ...
More problematic is that an overwhelming number of farms, including those that are part of complex farm businesses, are owned and operated by one or two related families. Therefore, the terms simple farm and family farm are not synonyms.
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From page 105... ...
. The essence of the problem, and an important source of complexity in agricultural production, arises from the way farming activities are located within the larger food and agriculture supply chain.
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From page 106... ...
represents the case in which farm businesses only undertake the agricultural production activities and transfers of intermediate goods that arise from inter-firm transactions. Returning to our wheat example, the farm purchases seed and fertilizer from elsewhere, and the harvested wheat is sold to a flour mill.24 The rest -- all of the planting, cultivation, and harvesting -- is undertaken under the direct management of the farm.
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From page 107... ...
More than 50 years ago, the USDA and the Census Bureau recognized the increasing importance of these businesses to the overall farm economy and conducted the first Census of Agricultural Services as a follow-on survey to the 1969 Census of Agriculture. The following paragraph from the 1974 Census of Agriculture succinctly summarizes the motivation for expanding its scope to include such service providers: Until the 1940s, agriculture in America was largely self-reliant in regard to many production and harvesting practices now available from off-farm sources in the form of agricultural services.
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From page 108... ...
Documenting the relationships within farm businesses between the constituent establishments -- farm establishments and nonfarm establishments -- is key to overcoming the challenge of reporting on complex farms. To the extent that USDA should be reporting on agricultural production activities in the United States, regardless of the business entity carrying out that activity, these agricultural production activities should, in future, be surveyed.
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From page 109... ...
Notice that, in the last supply chain diagrammed above, the farm business engages in economic activity beyond agricultural production. As an example, if the farm business is a berry farm, it might process some fruit on-site to produce jams or preserves (manufacturing)
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From page 110... ...
Income at the household level thus may originate from different sources: farm income and nonfarm income. Nonfarm income can be defined as the net income from all nonfarm businesses, wage and nonwage categories.
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From page 111... ...
For data collection from complex farm businesses, the differences between farms and farm businesses and the decisions about whom to ask about farming activities, farmers, and households all have to be taken into account. Farms, farm businesses, and farm households -- and even farm fields -- each inhabit their own universes that can be represented in registers
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From page 112... ...
In addition, as argued above, attention must be paid to agricultural support activities and agricultural business complexes. This increased attention to complex farm businesses will require additional resources, which may be freed up by reducing the number of questions in the Census of Agriculture (especially concerning monetary aspects)
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From page 113... ...
115115 Farm labor contractors and crew leaders 115116 Farm management services 115210 Support activities for animal products SOURCE: U.S. Census Bureau, see https://www.census.gov/eos/www/naics/2012NAICS/2012_ Definition_File.pdf.
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