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Department of Agricultural, Environmental, and Development Economics


As Farming Grows More Complex, Need for Sound Data Only Increases

Oct. 17, 2018

Farming in America is a complex undertaking. There exists great diversity in the size, structure and organization of farms.  All farming operations are integral to the U.S. economy and the supply of reliable food sources. To understand the agricultural sector better and maintain good agricultural policies, data collection methods and measurement tools need to keep up with the current realities of farming.

“Complex farms are not necessarily large farms,” said Ani Katchova, an Associate Professor and Chair of the Farm Income Enhancement Program. “Complex farms can be multi-farm or multi-business entities, which can produce non-farm or value-added products.”

She adds that complex farms can have multiple owners and decision makers or be managed by hired managers, which leads to complex management and decision-making structures. Regardless of these complexities, agricultural output and the structure, management, and ownership of farms needs to be appropriately accounted for in the general economy. 

For the last two years, Katchova served on a 16-member panel of industry, academic, and statistical experts commissioned by The National Academies. They were tasked with coming up with insight and recommendations on how best to collect and measure information on American Agriculture.

The result is the just published report, Improving Data Collection and Measurement of Complex Farms. Its intent is to help the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) and Economic Research Service (ERS) collect more consistent and accurate data across the board.

“The current system relies on respondents having a choice about which activities are included in the farm and who are the operators, which can create ambiguity and be a burden for complex operations,” said Katchova. “This also leads to imperfect measurements of the size and scope of the farm economy and the farm population.”

A significant recommendation of the panel is that USDA should create a Farm Register, where a farm establishment is defined as a business establishment which is engaged in farming and for which profits are recorded.  Then a farm business should be defined as a collection of one or more farm establishment linked by common ownership or control.  This recommendation follows the international guidelines on registers and will remove ambiguity in definitions and line up farm business reporting with that of the rest of the U.S. businesses.

National Academies of Science, Engineering, Medicine Press Release.