Concerns rise for the future of the family farm

By CHELSEA HALL

info@peoplesdefender.com

Erik Scott of George­town, was named Ohio’s Out­stand­ing Young Farmer by the Ohio Farm Bureau Federation.

What will we be eat­ing in a decade if there are no farm­ers to replace the cur­rent farm­ers once they retire? For nearly 70 years, the num­ber of U.S. farms has been declin­ing, while the aver­age age of farm­ers has been ris­ing — it’s now 57 years old, accord­ing to the most recent U.S. Depart­ment of Agri­cul­ture statistics.

The fastest grow­ing group of farm oper­a­tors is those 65 years and over, while the num­ber in the age group enter­ing the farm­ing pro­fes­sion is dwin­dling, accord­ing to USDA sta­tis­tics. In 2002, there were 674,968 farm oper­a­tors 65 years and older. By 2007, the num­ber had risen to 823,435 farm oper­a­tors, a sig­nif­i­cant increase in this old­est group of farm­ers. On the other hand, in 2002, there were 851,091 farm oper­a­tors under 45 years old. That num­ber dropped in the next five years to 732,322.

Eighty-one per­cent of farm own­ers under 45 years of age also work off the farm, accord­ing to the USDA. New farms tend to be smaller and have younger oper­a­tors who also work off the farm. In a closer look, the 2007 Cen­sus of Agri­cul­ture shows a sig­nif­i­cant dif­fer­ence in the num­bers of farm­ers at oppo­site ends of the age spec­trum. In 2007, there were 54,147 farm oper­a­tors under the age of 25, in com­par­i­son to 289,999 oper­a­tors 75 years and over.

“There are not many new farm­ers — the replace­ments are chil­dren of cur­rent farm­ers,” said David Dugan, the OSU exten­sion edu­ca­tor for Ag and Nat­ural Resources.

One such replace­ment is Erik Scott of George­town, who was recently named Ohio’s Out­stand­ing Young Farmer by the Ohio Farm Bureau Fed­er­a­tion. The Out­stand­ing Young Farmer con­test is designed to help young farm­ers strengthen their busi­ness skills, develop mar­ket­ing oppor­tu­ni­ties and receive recog­ni­tion for their accom­plish­ments. Con­tes­tants are judged on the growth of their farm busi­nesses and involve­ment in Farm Bureau and their community.

Scott, 27, farms with his par­ents, grow­ing corn, soy­beans, tobacco, hay and pas­ture. They also raise beef cat­tle and oper­ate a farm mar­ket that sells all nat­ural beef, accord­ing to The News Democrat.

“The younger gen­er­a­tion is hav­ing a tough time going into farm­ing,” Scott said. “Some of that can be blamed on the older gen­er­a­tion if they didn’t do estate planning.”

With no estate plan­ning to pro­vide for the trans­fer of a farm from one gen­er­a­tion to the next, a farm may end up out on the open mar­ket. A research farm in Scott’s area recently sold in the vicin­ity of $3,800 to $3,900 an acre, bring­ing the total pur­chase price to $1.2 mil­lion. With banks requir­ing 20 per­cent down, that’s nearly a quar­ter of a mil­lion dol­lars a buyer would have to have up front to make the pur­chase. And that’s if the buyer qual­i­fies — some­thing dif­fi­cult to accom­plish for some­one just try­ing to get started.

“It’s extremely hard to buy farms,” said Scott. “There are so many large oper­a­tions com­pet­ing for the farms that they bring an out­landish price. If you don’t have a chunk of money lay­ing aside, you can’t make the down pay­ment, and most young peo­ple lack the credit his­tory to get a loan.

“That’s the hard­est part — one per­son I know tried to buy his family’s farm, but he didn’t qual­ify for the loan. There went the hope of keep­ing the farm in the fam­ily. It’s really a let-down when that hap­pens, after the grand­par­ents or par­ents work so hard to pay for the farm and develop it, and then the chil­dren have to see it go out of the fam­ily. They need to leave the farm in a trust or an LLC (lim­ited lia­bil­ity corporation).”

For­tu­nately for Scott, his mater­nal grand­par­ents had the fore­sight to set up a plan to keep their family’s farm­land in the capa­ble hands of his par­ents, Frankie Stith-Scott and Fred Scott, and their descen­dants. The fam­ily has its own cor­po­ra­tion, Wal­nut Farms, Inc., that owns the real estate. Scott, his par­ents and his sis­ter are the share­hold­ers. The corporation’s by-laws even pro­tect the farm from becom­ing part of a divorce set­tle­ment in the future as the shares can­not be owned by any­one who is not a blood rel­a­tive of his par­ents, accord­ing to Scott.

The farm is fur­ther pro­tected from being lost through the risks involved in its oper­a­tion. Wal­nut Farms does not oper­ate the farm, but Scott and his father oper­ate the farm under a com­pletely sep­a­rate part­ner­ship. The part­ner­ship owns all the equip­ment and live­stock. In addi­tion to the farm mar­ket for beef, they are also in the process of mak­ing their own brand.

“It’s one thing to buy a farm,” Scott explained. “It’s another to buy it and oper­ate it. If an estate plan is done cor­rectly, and you have a way to get started with a farm, then you have to have a way to oper­ate it. To oper­ate a farm takes a huge amount of cap­i­tal. A lot of peo­ple dive in with­out con­sid­er­a­tion of mar­ket swings and droughts. They plan for a typ­i­cal year, but when that doesn’t hap­pen, they have to make a deci­sion to either pay back the oper­at­ing loan or make their mort­gage payment.”

“Peo­ple that have the poten­tial of tak­ing over farms are see­ing more oppor­tu­ni­ties else­where for an occu­pa­tion,” said Becky Minton, Pee­bles High School agri­cul­ture edu­ca­tor and FFA advi­sor. “When you con­sider the time, money and stress involved with farm­ing, it makes sense that the younger gen­er­a­tion is tak­ing dif­fer­ent paths for employment.

What is being done to increase the inter­est for younger farm­ers to stay in the farm­ing busi­ness? Agri­cul­tural classes are offered at many high schools in Ohio, but the prob­lem is that, from those groups of stu­dents, few of them are already “farm kids” and many are going into other aspects of agri­cul­ture, niche farm­ing or are tak­ing a com­pletely dif­fer­ent path in gen­eral, accord­ing to Minton. Stu­dents have been taught that unless there is a set­tled farm to be taken over, it is a very risky endeavor and for good rea­son, she said. “The prob­lem I have, is what about the younger gen­er­a­tion whose par­ents don’t farm?” ques­tioned Scott. “It ‘s very, very tough for them to get started in farm­ing, but I won’t say it can’t be done. First they would have to learn the prac­tices and gen­eral knowl­edge they would need to be successful.”

Scott said he is still learn­ing from his par­ents, and the expe­ri­ence they have is price­less. His father has spent his life­time farm­ing and works at the local equip­ment deal­er­ship. His mother is an agri­cul­tural finance major from The Ohio State Uni­ver­sity and has worked since grad­u­a­tion as a loan offi­cer with USDA. They went through a major drought dur­ing the 1980s from two dif­fer­ent per­spec­tives. His mother saw the finan­cial aspect from work­ing with farm­ers going through the drought. His father saw the producer’s side.

“It would be really hard to replace their expe­ri­ence,” Scott said. “They can ask the right ques­tions — is this the right time to start some­thing new? Will the mar­ket hold? Their expe­ri­ences are extremely valu­able. That is really going to be what sets the farm­ers in the younger gen­er­a­tion apart — will they be able to take the expe­ri­ence of the older gen­er­a­tion and apply it?”

“What farm­ers do is essen­tial and good, for the com­mu­nity, and for the future,” Minton said. “It is impor­tant to pro­vide sup­port for young peo­ple who are inter­ested in agri­cul­ture and would like to begin a career in agri­cul­ture. Our well being depends upon those who choose to pro­duce our food prod­ucts… The impor­tant thing to remem­ber is not to dwell on the issue but find ways to turn the trend around. As an agri­cul­tural edu­ca­tor, I feel an impor­tance to edu­cate every­one about agri­cul­ture and where our food comes from; and a sense of urgency to ensure that the art of farm­ing is not lost.

“It seems that Amer­ica has lost sight of the impor­tance of agri­cul­ture in our coun­try and our abil­ity to feed the world,” said Minton. “How­ever, when you look at all of the sta­tis­tics and log­i­cally look around at what is hap­pen­ing in the U.S., the future of agri­cul­ture doesn’t look grim but is plen­ti­ful. On aver­age each farmer in Amer­ica pro­duces enough food to feed 155 peo­ple, and one in seven Ohioans has an agriculture-related job, which is a huge increase, even in the last 50 years. It has been a tough cou­ple of years for farm­ers, but they con­tinue to pro­duce a local, safe, afford­able food sup­ply so that peo­ple can still “talk” about farm­ers while their mouths are full of food.”

(Chelsea Hall is an intern at The People’s Defender in West Union, Adams County. Staff writer Car­leta Weyrich also con­tributed to this story.)

Posted by Tina Murdock on Dec 30 2012. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.