Potential for Increased Income on Small Farms in Appalachian Kentucky

Abstract

Impoverished farmers still exist in the United States, especially in certain insular areas such as Appalachia (National Advisory Commission on Rural Poverty). These farmers tend to be older and poorly educated, the residual from migration of the young and better educated to urban areas over the past thirty to forty years; their farms tend to be small and unproductive. Even if these farmers had marketable skills, local opportunities for off-farm employment are limited. Assuming that society will make some effort to aid impoverished farmers, this paper examines whether aid can best be applied to improve their productive capabilities or to provide direct assistance in the form of transfer payments and incomein-kind (medicaid, food stamps), as now. Four eastern Kentucky counties (Jackson, Lee, Owsley, and Wolfe) are the subject of the study. In 1974, 57% of the farms in this four-county area had gross sales less than $2,500 and 79% had sales less than $5,000; 66% of the farmers were over age 45. In 1970, the entire population was classified as rural, with 37% living on farms. The unemployment rate was 11.5%; and 54% of the families had incomes below $3,200, the official poverty level (USDC 1971, 1976). Even if off-farm jobs were available, for older men with educational deficiencies to leave their homes and adjust to new work environments imposes potentially severe psychological stresses. Thus, if in society's judgment the incomes of these farmers are unacceptably low, the principal viable alternatives for improving incomes may be either permanent public assistance or increased farm earnings. A first step in evaluating these alternatives is to estimate the possible increases in farm incomes, i.e., to identify the practical upper bound on farm income. The main body of this paper addresses this first step. The paper concludes with a partial evaluation of this evidence in the light of experience with agricultural extension programs and institutional data on such things as tax structures. For these purposes, a low income farmer is defined as a full-time (working fewer than 100 days annually off the farm) operator under 65 years of age whose gross farm sales are less than $5,000. A survey of 342 operators in the four-county area identified 102 (29%) in this category.