security includes at least three important objectives that are addressed in this part of this chapter:

  • Ensure individual farm business viability.

  • Maintain farm household economic security.

  • Maintain or increase the quality of life for farm families and workers.

Ensuring that farm workers have economic security and fair labor conditions is another important goal at the farm level; however, labor issues (and farms’ contributions to community well-being) are discussed in the second part of the chapter.

At face value, most people would equate economic security with conventional measures of financial profitability, efficiency, and returns to various assets. Although those aspects are indeed critical components of the economic security of farm businesses, households, and communities, broader outcomes—such as having sufficient income to meet household needs, ensuring an adequate quality of life, minimizing risk, and treating people fairly—need to be considered. There are complex and varying linkages between economic performance of farming practices and systems, and broader economic well-being or security. The assessment of any individual farm’s economic performance might differ depending on the treatment of short-term versus long-term time horizons, acceptable levels of volatility and risk, and perceptions about different forms of economic rewards and tradeoffs between outcomes. There is often considerable variability in economic performance among farms that use similar technical and managerial production practices. Variations in economic performance could be a result of differences in biophysical conditions (such as soil type and weather), resource endowments, management ability, or local market conditions, rather than the types of farming practices themselves.

Financial returns to farming businesses reflect prices for farm inputs and outputs that are determined not only by market forces of supply and demand, but also by policy context. For example, national farm commodity support programs, public subsidies for certain types of conservation practices, and international trade rules all influence the costs of production and market prices for most important farm commodities. The development (or absence) of local institutions to facilitate direct producer-consumer markets is another example of the influence of collective institutions on the success of individual farm marketing strategies. Regional variability and short-term or long-term changes in policies, programs, or institutions affect farmers’ management decisions and influence the economic performance of many farming systems. Many of those broader contextual influences are discussed in Chapter 6.

The social context of farm production influences the economic viability of farming enterprises and farm households. The level of economic performance required to sustain the farm business depends, in part, on the personal goals and values, and on the consumption, life style, and level of income that is acceptable to the farmer or the household members (Gasson et al., 1988; Gasson and Errington, 1993). Access to nonfarming sources of income is another important factor (Mishra et al., 2002). The persistence of family-scale farming enterprises over the last 100 years has been attributed by many scholars to a willingness of such producers to accept levels of economic return that are below normal market rates (Friedmann, 1978; Bennett, 1982; Reinhardt and Barlett, 1989; Barlett, 1993). The organization and production practices adopted by individual farm businesses also can affect the economic security of hired farm workers, and conversely, the availability of labor can affect the economic outcomes and sustainability of the farm operation, as will be discussed in a later part of this chapter.



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