Farm size, rural community income and consumers welfare

Decline in the number of farms and the resulting increase in average farm size has been a persistent feature of the change occurring in American agriculture throughout the last three decades. Different farm-size assumptions are examined and their effect on certain key farm and nonfarm variables estimated. None of the altematives analyzed provides benefits for all groups considered, and policies which may favor anyone of these scenarios involve trade-offs between the variables discussed. Key words: linear programming model; farm-size altematives; net farm income; consumer food costs; farm prices; farm labor and capital usage; number of commercial farms; off-farm income generation. A MERICAN AGRICULTURE has been undersome form of structural change since 1920.The number of farms and the work force of agriculture reached their peak about that time and, except for the 1930's depression, have been in a continuous downward trend for the last several decades. The trend toward fewer farms and a reduced work force was accentuated, of course, as postwar prosperity and technolog-ical improvements provided capital and scale economies favoring larger farms in all producing regions of the country. Farm Structure and Rural Community Welfare These changes in the structure of farms were accompanied by shifts in the supply functions of agricultural commodities. Since markets were re-strained by low domestic demand elasticities and a complex of institutional and economic re-straints on exports, greater supply capacity brought actual or potential reductions in total revenue and net farm income to the agricultural sector. In attempts to ward off inequitable dis-tributions wherein commercial agriculture sacri-ficed in income and the consuming sector gained in lowered real food prices, American society in-vested upwards of $70 billion on direct and indirect programs to increase farm income through supply control, commodity storage and loans, price supports, and international food aid