The structure of US agriculture has been shaped towards less but the farms are larger. In the early times of this country, people could make a living on the 160 acres they had received from The Homestead Act of 1862. This act gave families clear titles to 160 acres if they had lived on it for five years. Though in today? s changing world farmers have been forced to increase the sites of their operations or go out of the farming business.
The farming business is a way of life to most of those who do it and do not want to quit doing it now but with the off of the farm incomes increasing all of the time it is making farmers change their way of life. The Agriculture Economics and Agribusiness textbook, sixth addition, says that there are three classifications of farms by economic size. The first classification is the expanding sector. This sector sales more than $100,000 per year of farm products, it is 16% of the farms in the US. It also produces 80% of all of the farm outputs or products in the US.
The farms in this sector produce nearly all of the farm products produced the US but are only contribute to small parts of the farms in the US. The expanding sector of agriculture numbered 271,000 farms in the 1980? s. This number increased to 326,000 farms by 1991. The off of the farm income of this sector is only $20,847 per farm. The total income per farm averaged $180,276 per year. This sectors main income comes from farming and very little of its income comes from off of the farm jobs. This sector is growing because there is becoming more big farms that produce most of our food.
The second sector is called the declining sector. This sector includes the farms that sold products between $20,000 and $99,000 worth of products a year. Those farms decreased from 637,000 in 1980 to 549,000 in 1991. These farms produced only 16%of the total farming output. The income for those farms operators averaged $47,018 per farm in 1991. This used to be the most popular sector of farming people made there living off of small farms like this but within the last 20 years this sector has decreased growth and is decreasing more all the time.
These small farms are either being bought out by the larger farms or the owners of these farms could not make a living at it. With the declining of this sector, it is leading more people to off of the farm jobs and is decreasing the agricultural world. The third sector of the three is the noncommercial farms, or the hobby farmers. These farms totaled 1,229,000 in the US in 1991. They produce a very small percentage of the products produced in the US. This sector total income equals $35,163 per year. Over 100% of this income comes from off of the farm jobs.
This income equaled $35,206 a year on the average, this sector loses $43 a year in the farming business. These people do not mind taking the loss because they have other jobs and just farm as a hobby, part time or retirement operations. The farming world has changed a great deal in the past twenty years with new technology one person can do more so the size of the farms keeps growing. Although, with all of the cost of this technology, the small farms cannot compete with the big ones. Therefore, there are more and more of these farms going out of business. The three sectors of farming I talked about earlier covers all farms in the US.
The first sector is growing because it takes more land and capitol to make a living from this day in time than it did in years past. The second one is getting smaller all the time because the small farmers like this cannot make a living still and are selling out to the large farms and moving to town. This group hurts the second sector because they do not mind taking losses by selling their products for less, they just farm for fun. The farms in the US are getting fewer but the size of these farms are growing. I think in the next twenty years we will see fewer farms but the sizes will be comparatively larger than they are today.