“Corporate farms” and “factory farms” are labels many people give to farms using modern equipment and technology. Following that definition then, you might think “family farms” would be operations using practices and technologies from a bygone era. In truth, a corporation is an ownership structure, not a farming practice. Most farms are modernized and may get labeled as “factory farms,” even though more than 97 percent of them are family-owned, like mine.
According to the U.S. Department of Agriculture (USDA), a family farm is owned primarily by the principal operator and his or her family members. Oftentimes, this ownership is passed down through the generations. For example, my husband and I are the fifth generation on our farm.
The other 2.4 percent of U.S. farms are classified by the USDA as owned by a “nonfamily,” which is divided further into subcategories, including corporate farms. Typically, even farms that fall under the “corporate farm” definition have no more than 10 shareholders and have likely incorporated for tax and management purposes.
Both of these definitions focus on ownership of the business and not on farming practices or farm size. In fact, according to the USDA’s Census of Agriculture, some family farms are very large, reaching sales of more than 5 million dollars, and half of nonfamily farms have less than $35,000 in sales per year.
It is important for farmers to have the freedom to choose a business model that works for them, and both family and corporate ownership have advantages. With a family ownership, input from shareholders isn’t needed, so business decisions are made by the people working on the farm every day. My husband and I make decisions about our farm at the dinner table with his parents. On the other hand, a corporation has the ability to seek outside investors to raise the large amount of capital required to run a farm today.
Oftentimes, the people who think of large farms as “factory farms” or corporate-owned are the ones who have never been to a farm and don’t know any farmers personally. The best way to get the facts is to talk to someone like me – a family farmer! What questions do you have?