The Role of Goal Structure in Enterprise Selection in U.S. Agriculture

Farmers are likely to be motivated by alternative goals besides profit maximization. Goal structure is highly influential in farmer enterprise selection decisions. This paper addresses the roles of goal structure, location, financial situation, and socio-demographic variables and their influence on farmers' farm enterprise selection decisions. This study uses the 2003 Agricultural Resource Management Survey (ARMS), a national farm-level data, and Tobit method to examine the impacts of goal structure and resource availability on enterprise choice. Results indicate that goal structure significantly influences enterprise selection. Farmers who indicated their primary reason for becoming a farm operator was to "Take over operation of the farm from a family member or another person," relative to "Develop a business to generate additional income," were more likely to receive higher percentages of farm income from beef, dairy, or crop production and lower percentages of income from broiler production. These results suggest the important role of farm succession in beef, dairy, and crop production, contrasted with its lesser role in broiler production relative to generating additional income