Beginning farmers' entry and exit: evidence from county level data

Abstract

Purpose

This paper identifies factors that affect entry and exit of beginning, young and women farmers and ranchers.

Design/methodology/approach

The empirical framework is fixed effects regression analysis that uses county level data to evaluate how barriers to entry, access to and use of credit, local economic environment, and climate affect entry and exit of Beginning Farmers and Ranchers (BFRs). The dataset is assembled from several sources matching the Census of Agriculture years for the period of 1997–2017.

Findings

Results show that new farmers are more likely to enter in counties with more and smaller farms and with lower farm productivity, indicating that BFRs have the potential to improve the overall productivity in such counties if able to grow and succeed. The results also indicate that the high capital intensity nature of farming is an effective barrier to entry. BFRs are more likely to do better in counties where agriculture is more important to the economy and with more off-farm work opportunities. The net entry is positively associated with higher input/output price index and the use of insurance but is unaffected by government payments and farm and off-farm income. The authors observe substitutability between farming and alternative self-employment for more entrepreneurial young people. Net entry increases with availability of non-real-estate loans but decreases with real estate credit. Thus, for BFRs to acquire the assets needed to reach optimal scale, access to credit remains essential.

Originality/value

The authors are not aware of other work that estimates how barriers to entry and other economic factors including access to credit affect entry and exit of BFRs of various ages and young and women farmers using the Census of Agriculture data up to 2017.

Citation

Hartarska, V., Nadolnyak, D. and Sehrawat, N. (2022), "Beginning farmers' entry and exit: evidence from county level data", Agricultural Finance Review, Vol. 82 No. 3, pp. 577-596. https://doi.org/10.1108/AFR-05-2021-0057