Off Farm income

Off Farm income

David Sparks Ph.D.
David Sparks Ph.D.
Off Farm Income Becoming More Important for Ag and Rural Economy

According to a recent study by the University of Missouri, American farmers and ranchers are becoming more and more dependent on off-farm employment and income to make end meet, which means rural communities are more and more connected to surrounding cities.

Researchers say 82 percent of farm household income now comes from off-farm sources.

Rob Fox with CoBank says while that number is high, that does not mean there is a mass exodus from the farm to urban communities. Many of those jobs are available for farmers right up the road, since rural economies are much more diverse than they use to be.

He says farming on average takes up only ten percent of the typical rural economy.

“The rest of the economy is highly diversified into services, construction, leisure, professional services and retail outlets, so I guess I’ve never seen that picture spelled out so clearly as to how diverse rural economies are.”

Currently 6.5 percent of workers in rural counties are employed in agriculture, compared to 15.4 percent in 1970.

Fox says the latest numbers go through 2018, but despite that, feels the rural economy is on the upswing.

“With telecommuting options, part time, you may be willing to commute 75-80 miles once or twice a week, so that give you the option to live in more rural communities, and that brings professional people with higher incomes and more ability to support local economies, goods and services. So, my conjecture here is that the pandemic is going to prove to be a good thing in the long term for the rural economy of rural America.”

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