Structure and Finances of U.S. Farms: Family Farm Report ... - AgWeb

Special Feature: Limited-Resource Farmers—Who Are They?USDA has long been interested in identifying (and counting) limitedresourcefarms because it is charged with aiding those farms and their operators.The 2008 Farm Act, for example, requires USDA to:• Exempt limited-resource farmers from the requirement that producershave more than 10 base acres to receive certain commodity-relatedGovernment payments.• Make limited-resource farmers eligible for higher cost-sharing rates inEQIP.• Exempt limited-resource farmers from certain crop insurance fees. 6In addition, USDA agencies with programs targeted at farms—such as theFarm Service Agency (FSA), the Risk Management Agency (RMA), and theNatural Resources Conservation Service (NRCS)—have outreach efforts toencourage the participation of limited-resource farmers.Limited-resource farms are identified under four definitions in this specialfeature (see box, “Defining Limited-Resource Farms”). Based on the definitionused, the number of farms varies under different—but reasonable—constraints on farm sales, operator household income, farm assets, andhousehold net worth. Regardless of the definition used, however, the numberof limited-resource farms is relatively low and the characteristics of the farmsare similar. 7The Original DefinitionPerry and Ahearn (1993) first identified limited-resource farmers for ERS,although they used the term “limited-opportunity” rather than “limitedresource.”Their definition and analysis were based on 1988 data from theFarm Costs and Returns Survey (FCRS), a predecessor to ARMS. Theydefined limited-resource farms as those that met three criteria:6Drawn from “2008 Farm Bill Side-By-Side: Provisions for Traditionally UnderservedGroups” on the ERS website at:www.ers.usda.gov/farmbill/2008/titles/underserved.htm#titleix7Data from version 1 of the 2007 AgriculturalResource Management Survey(ARMS) are used in this section, sincethat was the only version to identifylimited-resource farms under the USDAwidedefinition, one of the four definitionsexamined. For more informationabout the various versions of ARMS, see“Appendix II: The Agricultural ResourceManagement Survey.”1. Operator household income less than the poverty level. Operatorhouseholds with income at this level had an inadequate income fromfarming and other sources.2. Farm sales less than $100,000. Farms with sales above this level weregenerally commercially viable.3. Farm assets less than $150,000. The median value of assets for farmswith sale less than $100,000 was approximately $150,000. Farms withassets below this level may have had insufficient assets to operatesuccessfully.Alternate DefinitionsWhen ERS created its farm classification system in 1998, it included limitedresourcefarms as one category, using the original Perry-Ahearn definition,with one modification. Family income was required to be below $20,00040Structure and Finances of U.S. Farms: Family Farm Report, 2010 Edition / EIB-66Economic Research Service/USDA