Structure of American Agriculture

Significant changes have occurred in American agriculture during the last 3 decades. The basic trend has been one of an increasing concentration of farms as well as supporting facilities. There has also been a drastic reduction in the number of farms, people living on farms, and a decline in rural vitality. It is estimated that less than one-half of all farmland is owned by the farm operator and that 75 percent of those who own farmland are not actual farm operators. These changes take on greater importance when viewed in the context of agriculture's larger role in U.S. and world economies. The United States depends on the agricultural community for food production and for farm and off-farm employment. It exports the produce from one out of every three harvested acres, making it a contributor to balancing the trade deficit. Without adequate safeguards, the U.S. economy can be significantly affected by the uncertainty of other nations' agricultural demands. Three basic pressures have contributed to the concentration and specialization in the farm sector and the growth of new farm characteristics including: (1) the cost-price squeeze; (2) the technology treadmill; and (3) Government programs. Since World War II, general inflation and rising costs of farm inputs have continually narrowed profit margins per unit of output. To maintain income, the surviving farmer had to concentrate his efforts on a smaller scale. In the 1970's, even the most aggressive farmers were feeling economic pressures. Because productivity per acre leveled off, future production increases to farm expansion have been limited. Farmers made use of technological breakthroughs in an attempt to maintain income. Costly equipment led to specialization by the farmers who could not afford to buy all of the equipment necessary for a general farm operation. Government programs, policies, and regulations have had structural implications which have not always been evident. Government programs have been keyed to production. Therefore, most of the benefits have been derived by a small number of large farms which produce most of the commodities. Some of these issues are considered in setting policy today. Economics, social soundness, environment, and politics should have overlapping roles in the process of determining farm policy.