COLUMBUS, Ohio -- Farm families everywhere often face difficulties when making decisions regarding passing down the farm to the next generation. Agricultural experts point to an aging farm population, a lack of succession planning, and fewer heirs choosing farming as an occupation as threats to the long-term existence of family farming.

Even more at risk are farms located near urban areas, said Shoshanah Inwood, a research associate with the Social Responsibility Initiative in Ohio State University's College of Food, Agricultural, and Environmental Sciences. Land in these areas -- at the "rural-urban interface" -- is much more expensive, so buying additional acreage to allow the farm to support more family members -- a standard practice in more rural areas -- often isn't an option.

To find out the succession strategies of farms near urban areas, Inwood interviewed farm families located near Columbus, Ohio, and Grand Rapids, Mich. Her findings are detailed in the SRI Topical Report 09-03, "Succession and Enterprise Adaptation at the Rural-Urban Interface," available online.

"I was struck by the diversity of strategies that farms were engaged in to keep the farm a productive enterprise while simultaneously passing down the farm to family members," said Inwood, who conducted the study with Jeff Sharp, a rural sociologist with Ohio State University Extension and the Ohio Agricultural Research and Development Center. "The assumption was that farms are doing the same types of things, but we found that they are employing a lot of different strategies, depending on their circumstances."

For the study, Inwood conducted interviews with 53 individuals representing 35 farms. Some farms had no heirs interested in continuing to run the farm; those farms were more likely to be in, or entering into, a state of decline.

"Even then, most wanted the farm to remain in agriculture, and were looking into selling land to other farmers or putting it into a land-trust arrangement," Inwood said.

On farms that had at least one heir, she observed four types of strategies being used to keep the farm viable:

Expanders. These farms, primarily focused on commodity production (corn, soybeans or dairy, for example), were following the traditional path of finding more land to buy or rent to increase their acreage, allowing them to increase the volume they could produce and sell in commodity markets.

Intensifiers. Instead of expanding their land base, these families are intensifying operations by increasing production of higher value crops, such as nursery crops or higher-value commodity crops, to support more family members on the same piece of land. This group, Inwood found, is actively investing in new equipment and buildings.

Stackers. These farms were finding new revenue streams to add to their existing operations as a way to increase profitability and viability. For example, farms growing fruit and vegetable crops might have a family member interested in using the harvest to produce value-added products, such as jams or pies; some farms add completely new businesses, such as a landscaping business, as part of their operations; still other farms find ways to employ family members interested in marketing or education to use those skills to increase farm profitability.

Entrepreneurial Stackers. These farms started new enterprises complementary to the farm operation to provide more family members with a source of income. A case that typified this pattern was a fifth-generation farm that until the mid-1990s operated as a confinement dairy operation, barely able to support one family. The farm, Inwood said, made a conscious decision to adopt a holistic grazing system and became a certified organic milk operation. Since then, individual family members added enterprises including grass-based meats (such as beef, pork, lamb and poultry); eggs (from the pastured poultry); and artisan cheeses. The family also built an on-farm retail store and sold products directly to local retailers. In the end, the operation has been able to support four families with full-time work.

Inwood hopes her findings will inform local, state and federal decisions on policies that affect family farms -- policies as wide-ranging as zoning regulations to healthcare and labor policies.

"I think a lot of people assume that agriculture at the rural-urban interface just naturally enters a state of decline, but that's not always true," Inwood said. "And it's because of diversity -- farm families use a number of strategies to grow their operations, strengthen their business and make sure they're not as vulnerable to market fluctuations. We've known for a long time that diversity plays an important role in biological systems, and this study supports the notion that diversity is important in social systems, too."

Inwood conducted this study as part of her dissertation research. It is also part of a national study Inwood is also involved in, "Agricultural Adaptation at the Rural-Urban Interface," funded by the U.S. Department of Agriculture's National Research Initiative. For that research, Inwood and her colleagues are surveying farmers at the rural-urban interface in 619 counties nationwide to determine factors that affect their farm-related decisions. Her work on that project and her other research earned her a "New Voices Award" from the USDA's Sustainable Agriculture Research and Education program earlier this year.

As a result of that honor and as part of as part her participation in the 2009 USDA Ag Outlook Forum, Inwood and three others met with Secretary of Agriculture Tom Vilsack to offer insight on federal policy.

"One thing the secretary seemed very interested in was when I talked about the importance of healthcare to family farms," Inwood said. "So many farm families need to keep an off-farm job just for the health insurance it provides. And the expense of offering health insurance to employees really limits the number of workers they hire."

Many factors affect the viability of family farms, especially those at the edge of urban areas, Inwood said. "Policies don't necessarily have to be land-based to have an influence," she said.

SOURCE: Ohio State University.