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Summary of Report

Change in Farm Survey Allows First
In-Depth Look at Farming Retirees

AER-730, May 1996

Contact: Robert Hoppe, 202-694-5572, rhoppe@ERS.USDA.gov

Thanks to a change in the nation's most comprehensive farm survey, a new report from USDA's Economic Research Service provides the first in-depth look at a significant segment of the U.S. farm community--retired farm operators.

Who Are Retired Farm Operators? is based on statistics from the 1993 version of USDA's Farm Costs and Returns Survey which, for the first time, allowed a response of "retired" to a question about the major occupation of the operator. The survey identified about 352,000 retired farm operators, usually running very small farms. These retirees, whose previous profession may or may not have been farming, accounted for 17 percent of all U.S. farm operators.

The information on retired producers may have implications for farm policy, as it gives analysts the ability to separate retired farmers who may produce little from the farmers who produce the bulk of U.S. farm output. The information also has implications for the use of farming statistics, the importance of farming to retired operators, the importance of the Conservation Reserve Program (CRP) to retired operators, and the future of farming.

Most of the farming retirees were counted as farm operators because only $1,000 worth of agricultural sales is necessary for an operation to qualify as a farm. About 84 percent of retiree-operated farms had sales of less than $10,000 in 1993; only 2 percent had sales of $50,000 or more. Therefore, although retirees ran 17 percent of U.S. farms in 1993, their farms accounted for only 2 percent of farm production.

Also, the retired operators spend relatively few hours on farm work, they operate only one-third the number of acres (143) as the national average, and they depend heavily on Social Security and other retirement income.

Retired farmers, however, receive two important economic benefits from their farms: farms are a major financial asset, and they provide nonmonetary income that is not included in standard measures of household income. In 1993, retired operators' farms generated an average of $3,500 in noncash income, made up of the rental value of farm dwellings and the value of farm products consumed on the farm.

The CRP is important to retired farmers: about 18 percent had land in the CRP in 1993, compared with 11 percent of all farmers, and about 17 percent of their gross cash income came from government payments, mostly CRP payments.

Because farm operators tend to be much older than the labor force as a whole, using "retired" as an answer in the annual U.S. farm survey allows a more realistic response for older operators who may be phasing out of farming. About 27 percent of all farm operators were at least 65 years old in 1993, compared with only 3 percent of the civilian labor force and 7 percent of the nonfarm self-employed.

Caution should be used when interpreting broad descriptions of U.S. agriculture based on aggregate statistics. U.S. farms are diverse, and national averages hide much of the variation within the industry.


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