Off-farm Income: Working to Fix the Farm Income Imbalance
A recent CoBank report completed by the University of Missouri shows 82 percent of farm household income now comes from off-farm sources.
Most farmers cited reliable income as the top reason for off-farm employment, as one-half of farm households have negative farm income in a typical year. Health and retirement benefits were also cited as keys reasons for off-farm jobs within farm households.
Agriculture Secretary Tom Vilsack says it’s something he noticed when he returned USDA with the Biden administration.
“When I came back to the department, one of the first things that landed on my desk, ERS puts out a chart of every day. It’s a really amazing little thing that they do, and I may be the first secretary that really actually couldn’t wait to get the chart of the day. So, one of the charts that they gave like in the first week I was there, was a chart that was a little bit distressing because it indicated that 89.6 percent of farms in this country don’t generate the majority of income for the farm family that’s farming. So, that means that those farms, somebody’s working off the farm. And I thought to myself, well, we can’t say that we’ve got a completely successful model, if only ten percent of the folks are able to make a living off what they do and what they love to do. So, our task at USDA is to figure out more new and better markets.”
He says there are several ways the Department of Agriculture is working to build new markets to change the farm income balance.
“So. that means traditionally we want to expand exports because we understand or appreciate how important exports are and we are in fact doing that. We had a record export year last year, a record export this year. But we can’t just depend on that, we’ve got to have that local regional food system market opportunity. We have to have the organic value-added proposition, competition and capacity for farmer-owned processing capacity. We need to expand renewable fuels and we need to figure out ways to reduce costs for farmers, and so, all of that is going on at USDA.”
The University of Missouri report additionally shows only 6.5 percent of workers in rural counties are employed in agriculture, compared to 15.4 percent in 1970.