Monday, March 10, 2014
'Why," a reader asked, "did you leave farming out of the mix?" He was referring to my recent efforts to highlight the importance of self-employed, sole proprietors in the overall picture of the Maine economy.
He's right, of course. Farms, small and large, are a critical part of Maine's overall jobs picture. And small farms -- officially defined as "an establishment that produces, or normally would be expected to produce, at least $1,000 worth of farm products (crops and livestock) in a typical year" -- are an increasingly important component of Maine's agricultural industry.
In 2008, the total value of crop and livestock sales, government payments and the value of products consumed on the farm by their owners amounted to approximately $750 million for all Maine farms. Deducting production expenses and declining inventory values left net income of approximately $106 million.
Of this, approximately $40 million derived from corporate farms, and the remaining $66 million from sole proprietorships and partnerships. According to Bureau of Economic Analysis data, this income supported just over 7,200 farm proprietors.
The average income per proprietor was therefore slightly less than $9,200 per year. This hardly munificent average tends to bounce around from year to year depending on the relative changes in crop prices and production costs -- most importantly fuel and fertilizer expenses.
Over the past decade, it hit a low of $6,500 per year in 2002 and a high of $16,400 in 2005.
Interestingly, this net income per proprietor is far less than the average annual wage of $31,200 earned by formal farm employees in 2008.
In short, farm proprietors -- like most sole proprietors throughout the Maine economy -- are not getting rich running their enterprises.
In fact, many of these 7,200 entrepreneurs work other jobs and many of these establishments are family enterprises supported by the "formal" employment of other family members. But, as is the case with sole proprietors in every other sector of the economy, having a "job" or getting rich are not the central purposes of the endeavor.
Maine's farm proprietors are not simply business operators. They are foundations for a rural way of life whose rewards derive not simply from income earned but also from the variety of work that needs to be done and the place where it must be done -- at home.
This commitment to place creates value far beyond the income earned from selling crops and livestock.
The "small-town atmosphere" that consistently ranks as one of the primary reasons so many Mainers like living where they do is in no small part the result of small family farms.
The open fields, panoramic vistas, quaint stone fences and bucolic feel of the countryside -- so central a component of the quality of place that has become our major competitive advantage across all economic sectors -- is dependent on a healthy agricultural foundation.
On less ethereal grounds, a healthy Maine agricultural sector -- particularly one devoted to providing local food for local consumers -- can play an important role in producing generally healthier Maine people and a healthier Maine environment.
Locally grown food leaves a smaller carbon footprint in our atmosphere and a smaller chemical footprint in our bodies. Paying more attention to what we put in our bodies and where it comes from helps local farmers and keeps health care costs down.
But pointing out the importance of our agricultural entrepreneurs must not be an exercise in maudlin sentimentality. The successful family farm of 2010 is not just a re-run of the old TV show "Lassie." Acquiring new technical, financial, human and marketing skills is just as important for a small family farm as it is for a biotech firm.
Farming today is a fast-moving, technologically advanced, acutely customer-oriented enterprise that exists not as a throwback to a simpler age, but as an essential part of the lives we live today.
At least that's what it can be; that's what Maine's small farmers are trying to become and what any truly small-business-oriented, entrepreneurially supportive public policy should set as its goal for our agricultural sector.
Charles Lawton is senior economist for Planning Decisions, a public policy research firm. He can be reached at: email@example.com