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ChangingStructure

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Title: ChangingStructure


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         The Changing Structure of
Agriculture Independent Insurance Agents of
Iowa Rural Agents Conference January 26,
2006       Michael Duffy Director, Beginning
Farmer Center              
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The Changing Structure of Agriculture Outline
  • Farming
  • Agribusiness
  • Consumption

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The Changing Structure of Agriculture Farming
  • A farm is defined as any place that sold or could
    have sold 1,000 worth of agricultural products.
    This definition has been used since 1974
  • Case of the disappearing middle
  • Tight margins
  • Increased reliance on government payments
  • Aging population
  • Changing rural environment

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General Characteristics and Demographics
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Income and Enterprises
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Land
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Next Generation
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The Changing Structure of Agriculture
Agribusiness
  • Disappearing middle
  • Increasing concentration

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Agribusiness Concentration
  • Changes and increased concentration have occurred
    in almost all phases of agribusiness support
  • Seed
  • Machinery
  • Fertilizers
  • Pesticides

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Consumer Patterns
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Changing Structure of Agriculture Concluding
Thoughts
  • Agriculture is changing and will continue to
    change at the production, processing and
    consumption level
  • Production is dominated by a dual system with a
    large number of very small firms and a small
    number of large firms.
  • These trends have been continuing for a number of
    years

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Changing Structure of Agriculture Concluding
Thoughts
  • Concentration in agribusiness is resulting in
    fewer large firms with an increasing share of the
    market provided by fewer companies.
  • U.S. consumers spend a decreasing amount on food
    as such they are able to spend more away from
    home buying more of the attributes than the food

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Changing Structure of Agriculture Concluding
Thoughts
  • Consumer preference do change over time some
    indication that other attributes besides
    convenience and price are important
  • Energy price increases could slow or reverse some
    of the trends
  • Very little is inevitable the questions are
    should the U.S. be concerned with these trends
    and what could be done

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Changing Structure of Agriculture Concluding
Thoughts
  • Increasing concentration leaves the U.S. more
    vulnerable to supply disruption, bioterriorism,
    environmental impacts and pest changes
  • Strategies could be pursued at both the national
    and state level policies such as controlling
    anti-competitive behavior, internalizing the
    external costs, and supportive policies could all
    be enacted

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Possibilities for Income for Beginning Farmers
  • Farm with tight margins with a lot of volume
  • Widen the margins through management and
    marketing
  • Alter production for non-commodity commodities or
    alternative crops
  • Supplement income with off farm employment (could
    be on farm)
  • Full time employment, farming part-time or wait
    to start farming

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Changing Structure of Agriculture
  • Change is inevitable the direction of the change
    is not
  • We must decide as a society what type of
    agriculture we want and what we want from it
  • Individuals have to decide how they are going to
    fit in the structure and operate accordingly
  • The choice is ours

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Thank you!
  • For more information contact me
  • mduffy_at_iastate.edu
  • (515) 294-6160
  • www.econ.iastate.edu/faculty/duffy
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