Economic Information Bulletin No. (EIB-49) 41 pp

March 2009

Exploring Alternative Farm Definitions: Implications for Agricultural Statistics and Program Eligibility

Meeting agricultural policy and statistical goals requires a definition of U.S. agriculture's basic unit, the farm. However, these goals can be at odds with one another. USDA defines "farm" very broadly to comprehensively measure agricultural activity. Consequently, most establishments classified as farms in the United States produce very little, while most production occurs on a small number of much larger operations. While desirable for obtaining comprehensive national coverage, measurement and analysis based on the current definition can provide misleading characterizations of farms and farm structure in the United States. Additionally, more stringent requirements have been proposed for farms to qualify for Federal agricultural program benefits. This analysis outlines the structure of U.S. farms, discusses the current farm definition, evaluates several potential criteria that have been proposed to define target farms more precisely, and examines how these criteria affect both statistical coverage and program eligibility.

Keywords: Agricultural statistics, Agricultural Resource Management Survey (ARMS), farm income, off-farm income, farm businesses, farm definition, program eligibility

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