"may actually mask evidence that small farms aren't growing full force"
May 15, 2019 10:23 AM   Subscribe

Is it a Farm if it Doesn’t Sell Food? Civil Eats on "The latest Census of Agriculture, released yesterday by the U.S. Department of Agriculture (USDA) [...] The new census shows that nearly 604,000 farms reported sales below $1,000, a slight increase from 2012. It's not known how many of those farms had zero sales, since that data isn't published by the USDA".
posted by readinghippo (34 comments total) 24 users marked this as a favorite
Here's a twitter thread that indicates that many of these may be tax dodges.
posted by idb at 10:45 AM on May 15 [13 favorites]

Is it a farm if it doesn't grow food?

Echoing that Twitter thread: Dr. Sarah Taber continually makes a huge number of trenchant points, and also notes that the nostalgic sentimentalism we have toward farming is a big part of the problem. As well as the organic food and whole food scams.
posted by happyroach at 10:52 AM on May 15 [16 favorites]

Suspect my brother is one of those 600,000 farm owners; they sell none of their produce, just use it for his restaurant, or give it away. It's a lovely place, and they get a huge tax write-off for it.
posted by suelac at 10:55 AM on May 15 [3 favorites]

I imagine that, on bulk, many of these are tax dodges. However, for whatever it's worth,
Recently, Hoff said, her farm had two years with no crops—and no farm sales—because of hail and strong winds. This year, Hoff and her husband were able to pull in some income from seed, corn, grain, and alfalfa, she said—but it wasn’t enough to make a living. “The reason we’re still here is that my husband had an off-farm job for 32 years, and we’re using his pension to stay on the farm.”
Most of the small farmers I know can't make a living at farming—they farm on the side in order to keep a culture and way of life alive, and for entertainment, but at best they break even and all of their income comes from their day jobs. Rural life chronicler Noel Perrin famously joked, "I currently spend half my time teaching at Dartmouth, half farming, and half writing. That this adds up to three halves I am all too aware."

So I would caution folks here to not simply paint everyone with that broad brush. I'd absolutely love to farm if there was any chance at making a living at it, but in these times that's simply not possible.
posted by ragtag at 10:57 AM on May 15 [16 favorites]

Most of the small farmers I know can't make a living at farming—they farm on the side in order to keep a culture and way of life alive, and for entertainment, but at best they break even and all of their income comes from their day jobs.

None of these small farmers would be included in this total or this discussion. Someone who farms and doesn't break even because they're spending all the money they make on diesel or feed or whatever is still producing something. Spending 20 grand on tractor parts and seed to grow 19 grand worth of alfalfa is still selling over $1,000 of agricultural products.

This isn't about farms that don't make a profit; this is about farms that don't make a product.
posted by Homeboy Trouble at 11:21 AM on May 15 [17 favorites]

I grew up on a family farm, and my stepfather and cousins still farm in the same community. The farmers in the family are actually really good at it, and in most years they make money at it. But everyone has a day job, too. My grandfather farmed and had various day jobs. I wouldn't say they were in it for the tax dodge. For them, it's totally a lifestyle thing. These are Scotch-Irish Appalachian populations whose families have been farming since time immemorial. They don't know how to quit.
posted by vibrotronica at 11:24 AM on May 15 [6 favorites]

This isn't about farms that don't make a profit; this is about farms that don't make a product.

If that's the case, then the article itself is very misleading!
posted by ragtag at 11:29 AM on May 15

My favorite agricultural use credit tax dodge is a fancy winery that built a gated subdivision around their existing property with grapes that were technically on the property of the homes but managed and harvested by the winery.

An older article on misusing ag land tax breaks, focused on Portland, OR.
posted by momus_window at 11:30 AM on May 15 [5 favorites]

"In 2012, 602,119 farms were counted in the below $1,000 in sales category by the census. Rosenberg’s analysis showed that the vast majority (440,000 of the roughly 466,000 farms) that generated no income in 2012 were owned by white operators. “Most zero-sales farms are owned by wealthy families,” Rosenberg said. “It looks like there is a large number of rural landowners who USDA counts as operators who aren’t producing anything for commercial or non-commercial markets.” This may be because anyone who owns a land designated a farm is eligible for a tax break, regardless of whether they sell or produce food."

That seems to get at what is happening. It's rich people with hobby farms/tax shelters.
posted by mandymanwasregistered at 11:35 AM on May 15 [19 favorites]

If that's the case, then the article itself is very misleading!

It seems pretty clear to me, it uses the term "$1000 in sales" and "zero-sales" mostly. I guess the difference between profits and sales might not be as clear if you think through the lens of income without specifying gross or net.

A small farm that costs 20 grand to run and sells 20 grand worth of stuff has no profit (and no net income, since those are basically the same thing), and if you're thinking about being that farmer you would say that you get no income from the farm. But the farm itself has 20 grand worth of (gross) income; it just has 20 grand of expenses at the same time.
posted by Homeboy Trouble at 11:48 AM on May 15 [15 favorites]

I've recently been looking at purchasing a farm in an adjacent state to use as a second/vacation home. Since I don't want to manage it as an active farm, I had a thought to setup a nonprofit that could do educational programs related to agriculture on the land, perhaps in partnership with the local schools, and then to give away any produce grown to local food banks or shelters. In the course of thinking this idea through, I started getting into the weeds (pardon the pun) on taxes for farms, tax breaks, issues of valuation, etc.

I've spent my career doing business consulting, analyzing companies, or running business lines in complex organizations. Making sense of financial and tax issues is nothing new to me. But all this just blew my mind. I've never seen a bigger, more complex, financial mess in my life.

(And even worse, I still don't own a farm.)
posted by NotMyselfRightNow at 11:49 AM on May 15 [9 favorites]

The thread by Dr. Taber is really good, so here's the Threadreader version in case anybody else finds those easier to follow.
posted by tobascodagama at 11:55 AM on May 15 [2 favorites]

Suelac, if your brother is using the produce grown on the farm for his restaurant, that would count as sales. What this is talking about are farms that produce literally nothing, or effectively nothing.
posted by rockindata at 12:01 PM on May 15 [5 favorites]

I grew up in Canada in a subdivision right on the edge of Mississauga, Ontario. Right next to our subdivision were fields and fields of open land. "Farmers" would come in and plant corn on them in the spring and then in the fall "Farmers" would come and plow the corn, unharvested under. They would also dump biosolids (leftovers from sewage treatment plants) on the fields.

Those "farmers" were land speculators/developers who had bought the land a long time ago and were waiting for the right market conditions to arrive and collecting farm tax breaks and subsidies by planting a crop they never intended to harvest. Then conditions were right in the late 80's and early 90s and about 20,000 new homes, dozens of box stores and several office parks went up while I was away at University. Everytime I came home I was gobsmacked by the changes.

Anytime you have complex tax codes you will have people who find the edge cases and then there will be a stampede of people piling into the edge cases.

We did have excellent corn cob fights in those fields though.
posted by srboisvert at 12:02 PM on May 15 [5 favorites]

The alternative to the farm as tax dodge is often farm turned into mcmansions, and that can never be turned back into a farm. Not to mention that fields of $700,000 mcmansions aren't great for the environment, and put more pressure on surrounding farms.
posted by sepviva at 12:11 PM on May 15 [3 favorites]

> Is it a Farm if it Doesn’t Sell Food?

If it's not a farm, perhaps it's a...Tzu?
posted by genpfault at 12:30 PM on May 15

Devin Nune's cows said it damn well is too a farm! And the goats in a pen on Trump's golf course can't tell the difference!
posted by nofundy at 1:01 PM on May 15 [4 favorites]

This reminds me of the "museums" in Gander Mountain and other sporting goods stores, consisting of a few taxidermied animals, that give them a huge property tax break.
posted by Bee'sWing at 1:18 PM on May 15 [2 favorites]

Not to mention that fields of $700,000 mcmansions aren't great for the environment

I'll need a cite for this, because I'm pretty sure that McMansions don't lay down industrial grade pesticides, herbicides, and chemical fertilizer multiple times per year. Lawn care products, yes, but last I knew, nobody was laying down Roundup at the rate your friendly neighborhood soybean farmer uses, not to mention the atrazine and neonicotinoids.

And we won't even go into the water pollution issues. There's a reason that Walmart sells so much bottled water in rural areas--nobody wants to poison their kids with tainted well-water...
posted by Chrischris at 1:21 PM on May 15 [3 favorites]

I'm seeing a lot of what appears to be grar-ing at those dastardly tax-dodging richy-riches, but bear in mind: the reason farms are tax-advantaged is in large part to preserve farm land. Once farm land is broken up into residential parcels, or paved over, it's very difficult to reclaim.

Having someone sit on the land and not farm it isn't a bad thing—they're probably not doing much damage to the soil by not intensively farming it—as long as they're retaining it as arable land.

The US contains some of the most productive farm land in the world, but the way we are using it isn't sustainable; there may come a time, particularly in light of climate change, when we really need all (or a lot more) arable land to keep food prices reasonable. Letting some people run unproductive hobby farms or graze horses on it or whatever gentlemen farmers do these days is not a bad way to idle it in the meantime.

Further, there are lots of situations in which farmers are effectively paid not to farm particular crops, and leave land idle, typically because of what it would do to the prices of particular products if everyone decided to put all the land they have into production all at once. (This isn't a theoretical problem; farms are subject to a really nasty boom-bust cycle without some stabilization/dampening mechanism.)

To anticipate one particular response: yes, it would be nice if the government subsidized or otherwise encouraged farming of healthy produce, green vegetables, etc etc. via sustainable methods on land not being used for intensive row-crop cultivation. I agree, and I suspect most reasonable people would too. But the problem is like anything else: voters collectively don't want to pay for it, and until you can convince voters to support higher taxes, it's not likely to happen.
posted by Kadin2048 at 1:32 PM on May 15 [12 favorites]

The better use isn't developing it into housing. If it's useful to let the land lie, the better use is to let the land return to forest or prairie or whatever the native ecosystem is for your area.
posted by vibratory manner of working at 1:40 PM on May 15 [10 favorites]

> But the problem is like anything else: voters collectively don't want to pay for it, and until you can convince voters to support higher taxes, it's not likely to happen.

But, aren't we the voters currently paying for the land anyway, by giving owners tax breaks?
posted by bring a tuba to a knife fight at 1:43 PM on May 15 [13 favorites]

Excellent post. Farming is so interesting. Crazy modern technology. Serpentine tax code. Long hours. Water makes or breaks you.

posted by zerobyproxy at 1:46 PM on May 15 [2 favorites]

I wonder if the Census of Agriculture counts tree farms*.
In my neck of the woods (the PNW) we have a lot of privately owned timberland which, being regulated by the Forest Service, is under the Department of Agriculture.
Many of these tree farms aren't going to sell or produce anything for 10 or 15 years, minimum.

There are, of course, a fairly high percentage that are using the various forestland tax breaks and incentives to dodge taxes on their family cabin or hunting land, but honestly, if it keeps the land timbered and not clearcut, I'm mostly OK with that.

*"normally would have been sold, during the year" is pretty vague when it comes to crops that take a decade or more to grow.
posted by madajb at 1:50 PM on May 15 [5 favorites]

Ahh, libertarians.
posted by Artw at 2:03 PM on May 15 [2 favorites]

I know some people who have 25 acres of marginal land that they use solely to produce hay for their horses. No sales occur whatsoever, and they have off-farm jobs to support this hobby farm, but it's hard for me to say that it's not in some sense an operating farm.
posted by crazy with stars at 2:41 PM on May 15 [4 favorites]

NotMyselfRightNow: “ I've never seen a bigger, more complex, financial mess in my life.”
Now throw in USDA grants and loans, including the conservation program, and you'll be even deeper in the weeds.
posted by ob1quixote at 3:40 PM on May 15 [2 favorites]

I had to be quite emphatic with my local county clerk to avoid being automatically enrolled in this tax dodge with my 3 fruit trees and 0.25 arable acres.
posted by joeyh at 4:32 PM on May 15 [1 favorite]

peeling away the farm vote?
Democrats take aim at big agribusiness - "Tech companies are not the only ones under fire as competition concerns rise."
Democrats are focusing their economic policy attention at home on the issue of corporate monopolies. And in the last couple of weeks, they have come up with a new focus for their complaints about antitrust issues that could help them gain ground in Republican and swing states — agribusiness.

At a recent “heartland forum” in Iowa, five Democratic presidential hopefuls laid out policies to break up “Big Ag” and help small, family farmers. Elizabeth Warren said she would challenge mergers of big agricultural companies, such as German chemicals group Bayer’s 2016 purchase of US seeds group Monsanto. Meanwhile, Amy Klobuchar, the ranking member of the Senate antitrust subcommittee, complained that two seed companies dominate that market, and four railroads — the same number as “on the Monopoly board”— do most food shipping.

Other contenders, including Cory Booker and Bernie Sanders, have introduced measures to level the playing field in farming. Even the centrist think-tank, Center for American Progress, has come out with a report on concentration in agribusiness, pointing out that four transnational companies control the bulk of America’s food supply. That turns Midwestern pig farmers into unlikely mascots for the diminishing power of labour relative to capital, and links their fortunes to those of groups being targeted by the Democrats, such as gig economy workers. Their message is that while Mr Trump may claim China is the problem, America has bigger issues at home.
posted by kliuless at 6:00 PM on May 15 [1 favorite]

also btw: Dr. Sarah Taber previously
posted by kliuless at 6:04 PM on May 15 [2 favorites]

I didn't see how people that rent their farmland to professional farmers are accounted for in this. My parents live on what is legally a farm but are too old to do anything other than a personal garden. But it is a working farm - the usable land is rented to a nearby farmer. That's a pretty common arrangement where they are, with retirees wanting to live in the country and getting a combination of a tax break and income stream from the land.
posted by Candleman at 7:16 PM on May 15 [4 favorites]

seems like that unpublished info is the sort of thing that http://www.muckrock.com can possibly get.
posted by gryftir at 6:57 PM on May 16

I didn't see how people that rent their farmland to professional farmers are accounted for in this.

In the area where I was looking, this would be considered an active farm, even if it didn't otherwise meet the minimum size requirement (25 continuous acres, if I recall correctly).
posted by NotMyselfRightNow at 5:17 AM on May 17 [1 favorite]

« Older Beads and viruses go hand in hand   |   Háá Nilyį́į́h Fleming Begaye Sr. Newer »

This thread has been archived and is closed to new comments