USA/ Statistically, the family farm makes up ninety-eight percent of all American farms, while farmers in general comprise 2% of the work force in the United States.
40% of the crop market is accounted for by 2.5% of nation's total farms, while family farmers produce approximately twenty-seven percent of the American crop production.
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Family farms are valued by communities in that they are viewed as a "cleaner quality of life." Other than increasing family unity, promoting good morals and decreasing crime rates, these farms provide job opportunities. In rural communities a local market is greatly relied upon as a food source. The family farmer mentality is that individual farms should be the focus, rather than the farming industry as a whole.
However, family farming is a rapidly decreasing trade. While over half of family farms have an off-farm income, the private domestic product fell from 35% to 5.8%, with a GNP rising to 40 fold. There are seven hundred and fifty thousand less family farms since 1981, an equivalent to 1 million jobs lost. While the number of family farms decreases, acreage increases. In over 70 years, 7 million farms have become 2 million, causing the rate of self employment in agriculture to decrease as well.
What is the cause of these trends? One answer is taxes. With a lack of access to markets, the benefits from farm programs go to larger farms. Family farmers are also unable to attract new investors. With a high cost of equiptment (averaging an intial cost of about $200,000) and an inflation in the price of land, investors are necessary. However, the average age for famers has risen to 58 years old, with only 6% of the farmers being under the age of 35. What investors look for in businesses is the probability that their investments will succeed or not. Failure is viewed as more common in older people, especially in a line of work that requires intense physical labor, such as farming. Though farmers do recieve consumer dollars for the food they produce, their income is often offset by inflation. In 1980, a farmer recieved $.37 for every consumer dollar spent on food, a net income equivalent to that of the Great Depression. While today, the farmer recieves $.20.
The new generation sells off the family farm and migrates from the rural country to the city. As these farms are shut down, they are not replaced by new farms and young farmers. Though farming is highly romanticized throughout history as a traditional culture that represents old America, the ideal is not necessarily accurate. Family farms today are struggling to survive.
Africa/In sub-Saharan Africa, almost 239 million people face serious consequences related to food security and nutrition. Family farming is an effective model that can provide solutions to overcome this challenge. During the African Regional Dialogue on family farming (6-7 November 2013, Cape Town, South Africa), participants identified specific actions for effective and sustainable collaboration in order to achieve food and nutrition security in the continent. They also recognized family farming as a way of life that contributes to the intergenerational transmission of knowledge, preservation of the environment, natural resources and cultural heritage. However, sustainable investments to fund agriculture and agricultural policies in favour of family farmers are still needed.
Family farming-Ms Musaya describes family farming as a traditional method of farming with a long history. She explains that originally family farming was solely a means to provide food for families but more recently African families are using it as a source of income. According to Ms Musaya the traditional concept of family farming needs to be modernized, family farming is not just a way to feed one's immediate family but has the potential to be a successful business that can have a much wider impact.
Gender issue - Women farmers in Africa should be empowered to take on more responsibilities at a higher 'entrepreneurial ' level. However, Ms Musaya underlines that it is fundamental for farmer organizations to analyse the existing gender issues in the communities where projects are going to be implemented. Traditionally African women and men have different roles in family farming; it is crucial to take these into consideration in order to use resources effectively. Projects should be tailor made according to community needs and structures.
Engaging youth- The future of family farming depends on youth. Making family farming more attractive to young people is crucial. With the appropriate enabling environments in place, family farming can be a successful and attractive business. The modernization and mechanization of family farming may also make it more appealing to younger generations.
Official statistics aside, there seems to be a wide gulf between farmers who are doing well and those who are not. What are successful farmers doing right?
South Africa
Based on average figures, it seems as if South Africa’s farmers are doing well. While this is undoubtedly true for some farmers, I’m not sure it can be said for the majority. Just what is the true state of agriculture in South Africa? And why are some farmers able to say they have had “12 good years”? What are their secrets?
Firstly, some statistics from the department of agriculture:
- The output of the agriculture sector has grown by 11,8% a year from 1970.
- Gross farm income increased from R5,8 billion in 1980/1981 to R178 billion in 2014/2015 – an annual growth of 11,2%.
- Over the same period, nett farm income increased from almost R2 billion to R56,6 billion.
- As can be seen, net farm income grew at a slightly lower rate than gross farm income. All the same, the growth in net farm income managed to, partially at least, keep up with inflation.
- The year to June 2015 was a favourable one for agriculture. Gross farm income increased by 10,1% from the previous year, while net farm income increased by 7,6%, mainly due to slightly lower production.
Superficially, then, it seems as if farmers have done quite well since 1970 – on average.
Total debt
But total farm debt, another indicator of farm profitability, increased by 10% a year, from R3,8 billion in 1980 to R79,3 billion in 2011. This on its own does not necessarily mean farmers are struggling – as long as the return on assets is higher than the cost of farm debt, farmers do better by borrowing money. Total farm debt equalled 14% of farm assets in 1980. By 2011, it was 32%. This means that farmers need a net farm income of R5,32 per R100 capital to serve this debt at 11% interest and a 10-year payback period, or a return on assets of 5,32%.
With net farm income currently at just over R56 billion, this equals a 20% return on total assets of R276,5 billion. On average, then, it seems as if farmers are able to repay debt and still obtain a relatively good return on their investment. However, as the income distribution in agriculture is very skewed, with the top 10% of farms probably responsible for more than 80% of total production, there is still a large majority of farmers who battle to make ends meet.
How do the top farmers do it?
Based on my personal observation of farmers over many years, here are the properties I feel that most successful farmers have in common:
- Mixed farming - Farmers who do well seem to be able to run diverse farming enterprises as specialised entities, but they are also able to integrate these into a whole. A good example is combining crops and livestock.
- Size does matter - Technology enables farmers to increase efficiency and limit cost. With the exception of GM seed, all new technology is scale-dependent, and smaller farmers are unable to afford the newer precision- farming technology. Large-scale enterprises are also able to use machinery more efficiently and productively.
- Learning - Successful farmers are usually not too busy to attend farmers’ meetings and learn from experts. Their larger enterprises also enable them to afford consultants.
- Families working together - Most of the larger enterprises in South Africa are family farms. While one frequently finds that family members on smaller farms are unable to work together, on the larger farms, families spend a lot of time and energy on determining each member’s position and role within the organisation. In most cases, external experts are used to develop family farming structures.
While these factors contribute to farming success, these farmers also have something else that’s important. They are positive about agriculture and about their future in agriculture. They have the ability to change a threat into an opportunity.
If land claims endangers property rights in South Africa, these farmers start farming operations in other countries in Africa and elsewhere. They also collect people around them who are as positive about agriculture as they are.
Securing the future
The world’s population is growing. At the same time, the middle class in developing countries is growing at a very fast rate. Food production will have to increase quickly to supply the growing population. We are ideally situated to supply Africa’s food demand in coming years. Farmers able to imitate or join the successful farmers are set to enjoy success.
South Africa need more FAMILY FARMERS
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