Are there more small farms or not? Everyone from Reuters to the NYT has documented what appears to be an increase in the number of small farms in the U.S. But blogging ag economist and former USDA Economic Research Service researcher, Michael Roberts disagrees. According to him (h/t Ezra Klein), the supposed increase in small farms represents the USDA potentially fudging the numbers:
USDA has also been working harder and harder to find and count hiding $1000 potential farms. Most of these guys don’t know they’re farms and so they can be hard to find and difficult to entice to return their census forms. So non-response rates are growing, mostly for tiny farms that probably don’t realize they’re farms in the first place.
Non-response? No problem. USDA just uses weights to account for the non-response which boosts the officially reported number of farms.
The important revelation here is that the USDA uses statistical weighting to arrive at the numbers for these micro-farms since many of these people don’t even self-identify as farmers — and so their precision is entirely a question of their methodology, i.e. how they decide to model the presence/frequency of these small operations. Census weighting is, of course, both controversial and necessary. Counting everything by hand can have a larger margin for error than rigorous statistical modeling. Indeed, this "controversy" is right now at the heart of a monumental battle between Democrats and Republicans over the U.S. Census (just ask Sen. Judd Gregg).
That said, there is nothing inherently wrong with the practice. However, even if your overall approach is solid, if you then change your weighting techniques from year to year, comparing annual changes is all but impossible. And that appears to be exactly what the USDA is doing.
The Ag Census is further clouded by politics and wrangling over money. According to Roberts, there was a battle over who got to count farms and even what qualified as a farm back in the ’90s.
Before USDA took over and the Census Bureau managed the Ag. Census, they wanted to restrict the definition of a farm to a place with $10,000 in sales or potential sales. This was in the mid-1990s. Since this seemingly innocuous change would have halved the number of farms and had a significant influence on the distribution of federal money to the states, it wasn’t going to happen. I’m unsure about the details but I think this is a key reason the Ag. Census moved from the Census Bureau to USDA.
Now we’re getting somewhere. The USDA has further incentive to inflate the number of farms and doesn’t particularly care if this clouds the picture on what’s really going on in agriculture. In fact, Roberts points out that focusing on these micro-farms, which may or may not be growing in numbers, misses the bigger picture: the growing concentration of land in mega-farms at the expense of mid-sized farms. The "growth" in micro-farms can’t be considered "real" and certainly not a trend — unless the USDA opens its books and explains exactly how it counts them from year to year. But the continued expansion of Big Ag? That’s one trend we can count on.
