Rural Community Building

USDA: Farm Activities Associated With Rural Development Initiatives

Faqir Singh Bagi and Richard Reeder from the Economic Research Service recently published a report that highlights  five types of farms that provide a product or perform a function related to USDA’s recent rural development initiatives. Farm Activities Associated With Rural Development Initiatives states that USDA has “put increased emphasis on funding farm-related business activities associated with renewable energy, local/regional food industries, and the use of farm and ranch natural resources. In this study, [they] identified five farm activities: organic production; value-added agriculture (activities that add value to a farm product or service, such as the production of jam, jelly, wine, or cheese); direct marketing to consumers; agritourism; and renewable energy/electricity production. We examined farm and farm operator characteristics to explore factors that may be related to a farmer’s decision to participate in these activities.

What Did the Study Find?

Farms whose owners pursue activities associated with rural development policy initiatives tended to differ from others in terms of several farm and farm operator characteristics, including farm size, net farm income, household income and net worth, and geographic location. For example:

• Farm operators involved with most of these activities were, on average, better educated, better advised, and had greater access to the Internet.

• Among the five activities evaluated, average farm household net worth was highest for agritour­ism farms ($2.0 million) and lowest for direct marketing farms ($631,000). Total household income was highest for energy/electricity farms ($164,000 annually) and lowest for direct mar­keting ($71,000 annually), on average.

• While a substantial percentage (39-60 percent) of the farms involved in these five farm activities qualify as rural residence farms, a higher percentage (65 percent) of all other farms fall into this rural residence farm category.

• Farms that focused on agritourism and energy/electricity production were typically larger in size, while direct marketing farms averaged fewer acres.

• Farm operator age and education, family net worth, farm size, farm ownership characteristics, farmland use and practices, farm typology, geographic location, farm management advice, and Internet access contribute to farmer involvement in one or more of the onfarm rural development activities.

• A rural or urban setting is statistically related to farmer involvement only in the direct marketing activity and not in the other onfarm activities studied.

While this study did not attempt to evaluate the costs and benefits to society resulting from growth in these farm-related activities, the findings may still have policy relevance. Public- and private-sector initiatives may have some influence on education, farm management advice, and Internet availability, all of which were found to be significantly related to the farm activities studied. The findings also indicate the types and location of farms engaged in one or more of the five farm activities covered in this report, or that would most likely be receptive to involvement if incentives were provided to do so.”

Click here is you would like to read the 2-page report summary or visit the USDA publications page.