US Farmers Find More Barriers To Agriculture

BIT by imperceptible bit, the United States is raising the barriers to farming. It takes more money, more land, and more machinery to become a full-time farmer today than it did a generation ago. Bigger environmental challenges - and more-complex regulations - loom on the horizon. Private property rights are slowly slipping away from the farm operator to the larger community, which worries about agricultural pollution and the use of scarce resources.

What does all this mean? The pressures on agriculture will continue, perhaps from a new set of forces.

``I don't think anyone can foresee an end to that trend'' for farming, says Lynn Daft, an agricultural consultant based in suburban Washington, D.C. ``But it may be for different reasons.''

Up to now, policymakers and farm groups have focused on economic pressures. Although these pressures continue to increase, new environmental and natural-resource concerns are moving to the forefront. These new concerns will make farming more complex in the future.

``In a sense, agriculture is just catching up with the rest of industry,'' says Carl Zulauf, an agricultural economist at Ohio State University. As a steel mill today has to follow regulations on such things as air and water emissions, so the farmer of tomorrow will face such regulations.

Dr. Zulauf says he thinks farmers will adapt to these regulations rather than leave the industry. But others aren't so sure. (See related articles.)

Consider the case of Jim Crane, a Hebron, Ohio, dairy farmer in his mid-20s. Out of his high-school graduating class of roughly 180, only four went into farming. Of those four, Mr. Crane says only he has stayed in farming.

His advantage? His grandfather sold him the farm. Farm prices are so high that it is almost prohibitive for a young person to get into the business today without family help, economists say. The real price of the average US farm has quadrupled since 1950, while the median US house has only doubled during the same period. (See chart)

In Crane's case, his grandfather bought the 160-acre farm in 1940 for $10,000. Today (with a second house on the land and other improvements) the farm would fetch about $500,000. Crane says he bought it for much less than that. ``If it wasn't for my grandfather, I never could have started at all,'' he says.

Crane is much more productive than his grandfather, thanks to labor-saving technology like tractors, automatic milkers, and improved feed. His cows produce roughly three times as much milk; he raises at least twice as much corn on an acre of land. He plows in a day what the farmer of 1920 did in a month.

Yet, these new technologies involve greater costs, forcing farmers to keep up by running bigger and bigger operations. The average farm in 1950 - 213 acres - had doubled by 1980. Crane's grandfather milked around 10 cows when he started farming in 1920; today, Crane milks 55.

Such labor-saving technologies caused a great burst of consolidation between 1940 and 1960. But since then, the pace of consolidation has steadily slowed. Farms got bigger - but more slowly than in the past (see chart). Fewer farmers left the land. Even in the crisis-ridden 1980s, net exits from farming ran far below the rate of the 1950s (see chart).

These numbers are slightly misleading because they include part-time farms, which were insulated from the 1980s farm crisis. Still, the changes are dramatic.

Compared with 1980, when land prices were sky high, the costs of farming are actually lower today - a fall of about one-third in the price of the average US farm. Some economists suggest that the economic pressures are abating and that agriculture will eventually reach a period of equilibrium.

But other barriers could change that scenario. Crane, for example, worries that new environmental rules could force him to spend $200,000 to build a facility to store manure. That's not money he has, since milk prices have dropped drastically.

``I can see where the environmental things are going to get worse,'' he says.