The Multifunctional Farm Household Enterprise : Using Farm Microdata to Assess the Rural Economy Impacts Generated by Farmer-Operated Off-Farm Businesses

Rural development specialists working with agricultural statistics confront the tension between collecting data for the purposes of measuring farm sector performance versus that of assessing farm household well-being. While it is recognized that the activities of the farm enterprise and farm household generate a broad spectrum of market relationships in their local economies, most agricultural data collection systems focus primarily on commodity production and just the basics of farm household structure. The survey instrument that embraces the dual mission of collecting data on the farming enterprise and on farm households can allow specialists to study a broader complement of farm-rural economy linkages. In this case study, we exploit microdata on farm household activities drawn from U.S. and Canadian national agricultural surveys to shed light on the impact of farmers who simultaneously operate off-farm businesses on their local communities – a farm/rural interface often overlooked by agricultural economists and rural development specialists alike. Given the sufficiently detailed data on these farmer-operated off-farm businesses, we are able to use the input/output modeling toolkit to recover estimates of nonfarm value added, sales, and employment generated by them. With respect to the rural economy, we find that the share of a rural county's employed nonfarm labor force linked to these off-farm businesses increases the further they are located from the urban core. Thus, the business acumen of these farm portfolio entrepreneurs is an even more valued intangible asset for communities in more remote rural areas. Hence, instead of depending on the local communities' resilience for their household well-being, they contribute to it