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Transitions in Agriculture

Thursday, March 26, 2015

Farmers, policy makers, researchers, and extension educators have long noted the growing concentration of agricultural land ownership among older landowners. Those landowners may not live on the farm, or even in the same community or state, as the farm. At the same time, the challenges faced by beginning farmers continue to draw attention. Taken together, these issues raise a number of concerns as rising demand for agricultural commodities, both internationally and as part of regional food systems, indicate the agricultural industry needs to remain resilient.

The nation’s agricultural institutions have grappled with the issues of farm succession and beginning farmer barriers for some time, generating a number of legislative and programming responses. However, the issues of exiting farmers and beginning farmers are closely related and highlight the need to address farm life-cycle issues from a holistic view.

Toward this goal, USDA’s Economic Research Service and Oklahoma State University brought together a broad range of agricultural professionals to examine transition issues and to identify priorities for research and data collection. More than 50 professionals from government, universities, farm organizations and public- and private-sector lenders participated.  The discussion generated an array of new research questions and ideas for policies and programs. Here are some key points made by the experts:

  • The future structure of America’s agriculture industry will be shaped not only by demographic trends, but by a changing domestic and global marketplace. These forces are creating an environment where creative and holistic approaches to farm transitions will be critical.
  • “Transitions in agriculture” implies that as one generation exits the farm operation, another will come to take its place. Are current farm operators willing, or indeed able, to leave the operation while they are alive, or are farm transitions events that can only take place after the senior generation has passed away?
  • Assuming the senior generation wants to gradually shift operation of the farm to the next generation before that passage, does the current policy and legal environment provide them the means to do so?
  • An important part of the founding, growth, maintenance and transition of any business is its tax environment. The existing tax code and current reform proposals could have significant implications for the farm tax burden and on the farm life-cycle.
  • Challenges exist for those who want to enter agriculture and farming. Beginning farmers face challenges in securing credit. General credit conditions can also influence the “buy or lease” decision of beginning farmers.
  • Social and cultural forces shape our farms and the rural communities they form. Farmers’ demographic and cultural backgrounds are important in how they view transition decisions. Personal life-cycle issues, such as access to child care and healthcare, also drive these business life-cycle decisions.

The current issue of Choices summarizes the highlights of those discussions. Review the articles. Then share your thoughts on how to create policies and programs that can aid the transition of farms to the next generation while supporting the development of regional food systems and keeping the industry at peak efficiency to meet the food, fiber and fuel needs of a growing world.


Mary Ahearn Mary Ahearn (mahearn54@aol.com)
Agricultural Economist, USDA Economic Research Service Co-Editor, Choices Magazine www.choicesmagazine.org

View more posts by Mary Ahearn

1 comment on “Transitions in Agriculture”

  1. Tim Gieseke
    Posted Tuesday, September 24, 2013 at 9:40:41 AM

    I realize it is an occupational hazard of economists to apply rational behaviors to humans conducting business transactions, but we all know how some decisions appear non-rational. Since ag policy is generally written by elderly gentlemen, there is also a tendency to seek a level of comfort and security; as that seems rational. But farmers are entrepreneurs and entrepreneurs take risks. Young people are willing to take more risks that elderly gentleman.

    What we have created through policy, is such a comfortable and secure path that elderly gentleman can continue to prosper in a dynamic world of agriculture without taking much risk. This security allows them be leverage their wealth to access land and capital and essentially keep out young, entrepreneurial farmers.
    The unintentional consequence of our current farm safety net is that it restricts access to agriculture by young farmers that are willing to manage their risk at a higher level than elderly gentleman. Instead of allowing many small risk takers transition agriculture from one generation to the next, we are setting ourselves up for one giant leap of a transition, but not necessarily the historically good kind.

The views and opinions expressed in AgChllenge2050 blog posts are solely the opinions of the authors, and not those of Farm Foundation, NFP.