PR - The Extent Of The Structural Change In Primary Agriculture

The primary agriculture production industry in OECD countries has been going through rapid increases in the concentration of production, giving rise to concerns about the industry developing into a bimodal distribution of farms with many small lifestyle oriented farms, a growing number of large farms, where the bulk of the production takes place, and fewer middle sized farms. It is true that larger farm businesses produce most of the agricultural commodities and get most of the government payments although less than the percentage of commodities they produce. However increased profitability is not completely correlated with increased farm business size, in that some small and medium sized farms are profitable. Unfortunately, many farm businesses especially the smaller ones are reliant on government payments for their financial survival. This is particularly true for Europe. Finally, the structural change in agricultural production that has occurred in the past will continue into the future. Concentration of production will continue with fewer and larger farm businesses. Niche market farm businesses, part time farms with off-farm income and lifestyle farms will dominate the farm numbers but not farm production.

Keywords: farm financial structure, profitability, government payments