The idea of corporate agriculture, or “agribusiness,” is largely a myth when looking at who owns and runs farms in the U.S., a report from the Department of Agriculture reveals.
Nearly 99 percent of all farms in America are owned and operated by families, and those farms make 89 percent of all the food produced in the U.S. What’s more, 90 percent of farms are “small farms,” which bring in less than $350,000 in annual income.
Non-family farms, “where the operator and persons related to the operator do not own a majority of the business,” account for around 1.3 percent of the all farms.
Being family-owned doesn’t necessarily mean the farm is small, though, and many large farms operated by families could be considered industrial agriculture. Nearly two-thirds of all the farms in the U.S., however, are small or medium-sized and bring in less than $1 million per year in revenues.
Farmers look to expand their land and consolidate operations for a simple economics reason: profit margins. Small farms have much lower profit margins, and therefore are at higher risk in rough times, like when market prices for milk fall but the farmer still has to feed the cows.
Big farms are becoming increasingly important to food production, and farms that bring in more than $5 million a year increased their share of food produced to 23 percent in 2015, compared to 13 percent in 1991.
The billions of dollars the government pays to farms in subsidies each year go to relatively few farms, according to the report. “Seventy-two percent of all farms received no farm-related Government payments in 2015,” the report finds.
Congress altered the structure of government assistance in the 2014 Farm Bill, opting for insurance payments for rough times over direct subsidies when the agriculture sector was at a peak in terms of revenues, most likely the result of delayed effects of the downturn. Agriculture revenues dropped sharply from 2014 to 2016.
As Congress begins to discuss the agriculture appropriations legislation next year, known as the Farm Bill, the types of farms receiving government assistance will be a big issue.
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