Could Iowa someday be a state of mega-farms and small acreages, with the traditional, midsized family farm a relic of the past?
It’s possible, and our state would be poorer for it, economically and culturally. But that doesn’t have to be the future. The outlook for Iowa’s family farms isn’t good, but the continued decline isn’t inevitable.
As reported in Sunday’s Register, midsized farms are getting squeezed. Profits are falling and debt levels are climbing. Their net on-farm income has fallen 44 percent from the farm economy’s peak in 2012 to 2015, according to a study by David Peters, a sociology professor at Iowa State University. And low grain prices likely mean more losses this year.
These farms are important, in both number and economic impact. In Iowa, about 16,200 farms are considered midsized (farming 800 to 1,000 acres and making gross cash income between $350,000 and a $1 million.) Of the state’s 20,525 commercial farms, the midsized dominate with 52.6 percent of agricultural sales and 68.2 percent of farmland.
But these farms are important for other reasons. Their decline is tied closely to the fates of small towns and school districts all over rural Iowa. The farmers’ labor and their spending help buoy county seats and even larger towns.
And as Peters notes, these farm families provide leadership on school boards and town councils, as well as in the Legislature.
As important as these farms are, they cannot compete with the state’s largest producers. In 2015, the midsized commercial farms earned on-farm income of $108,000, while the state’s very largest farms made a stunning $3 million per operation.
Don’t fool yourself into thinking this is simply a matter of the free market at work. Farm policy has encouraged this consolidation. Take the 2014 Farm Bill, signed by President Barack Obama. The final deal in conference committee rejected bipartisan reforms to limit farm program payments and crop insurance premium subsidies to the nation’s largest and wealthiest farms.
Programs that retire environmentally sensitive farmland, such as the Conservation Reserve Enhancement Program, took a hit in the bill. Reducing production on these acres can help prop up crop prices.
Our representatives have a chance to correct this in the 2018 farm bill. Here are a few other smart policies federal and state officials can support:
Funding rural development: All but the largest farmers in the state depend on off-farm income — in fact, it’s what is keeping midsized farms afloat, the ISU study suggests. That’s one reason good jobs — at factories, hospitals, construction sites, schools and small businesses — are crucial in rural areas. Iowa cities and towns need broadband expansion, housing and amenities to create vitality, and that requires smart economic-development and workforce-training policies on the state and federal levels.
Increasing trade: Expanding exports have helped Iowa’s commercial farms, but this is in jeopardy. The Trump administration pulled out of the Trans Pacific Partnership, and the impact is hitting home in rural Iowa. An analysis this month by Politico Magazinefound that the 11 other countries in the trade deal are now involved in 27 separate trade negotiations with one another and other major trading partners. For example, the European Union and Japan announced a deal that would give European pork producers an advantage of up to $2 per pound over U.S. exporters in some cases. Canada and Australia are also moving to cut deals with Asian nations to sell more beef and pork there.
“I’m scared to death,” Ron Prestage told Politico. His family is building a pork plant near Eagle Grove, in part to serve the Asian market.
Helping beginning farmers: Access to land is one of the biggest barriers for new farmers, as large operations outbid competitors. The next Farm Bill should protect programs that foster the next generation of farmers.
Peters offers another idea: Provide incentives for larger farmers to rent environmentally sensitive land — such as strips near rivers — to small farmers to grow alternative crops. The idea benefits all involved, including taxpayers, who gain better water quality. And such ideas help bridge the divide between small and large farmers.
Iowa needs all types of farmers, from hobbyists who grow produce for farmers markets to large producers who help keep food prices low. But it’s the vulnerable middle that needs the most support — and that Iowa depends upon the most.
Read More at The Des Moines Register