The essence of farming: market prices and farmers' incomes. Farm income and differences between them Farm income

AIC DEVELOPMENT

CLASSIFICATION OF FARMS IN CONSIDERATION OF FOREIGN FARMING EXPERIENCE

A. A. NIKITINA, Candidate of Economic Sciences, Associate Professor of the Department accounting and analysis of E-mail: [email protected] ru Bashkir State Agrarian University

According to the methodology adopted in the USA, all farms, depending on the volume of production, are divided into three groups - large, medium and small. In domestic practice, there is no single methodology for determining the amount of production in farms. Having studied foreign experience in determining the value of production in farms, the author proposes his own methodological approach to solving this problem.

Key words: farms, classification, production size, family farms, marketability, sales volume.

According to the American agency economic research, the United States has adopted a classification of farms based on purpose, strategy to achieve that goal, resource use and control, and economic outcomes. The typology of American farms includes the following three types: small family farms, large family farms, non-family farms. In turn, they are divided into subspecies with clear specific features.

1. Small family farms: - farms with limited resources. Sales less than $100,000 per year, asset value less than $150,000, owner's average annual income less than $20,000;

Isolated farms. Farms are characterized by closeness and remoteness. Produce products only for their own consumption;

Family farms. Small farms, characterized by the use of the funds of one family without the involvement of hired labor and without additional sources of income;

Family farms with involvement work force. They are classified into low-income farms with sales under $100k and high-income farms with sales between $100k and $249.9k.

2. Large family farms:

Large family farms with sales from $250,000 to $499,900;

Very large family farms with sales in excess of $500,000 per year.

3. Non-family farms:

Farming is organized on the basis of partnership or cooperation with a highly organized management structure.

This classification is based on the belonging of a particular farm to family business or to partnerships and property rights. About 90% of all farms in the United States were family farms, according to an analytical agency.

virtually eliminate the organization farming on the basis of cooperation or a corporation with the introduction of a highly organized management system. Family farms are fairly closed organizational and legal forms controlled by the head (owner) of the farm. Whole manufacturing process in this case depends on the effectiveness of daily decision-making by one owner - the head of the family and the labor of family members.

As for other family or non-family farms, classification features such as the presence of hired labor, contractual arrangements, part-time work and other sources of income arise.

The sales volume measure for estimating the size of farms is most often taken into account when agricultural prices change, which affect the income of the farmer, but with a constant volume of production in in kind.

In Germany, a family farm is a single-person farm managed by one person. According to the law on agricultural statistics, in Germany, a farm is considered as a farm, in which at least 1 hectare of agricultural land, or 8 heads of large cattle fattening, or 8 pigs, or 50 sheep, or 200 laying hens, or 0.3 ha of orchards, or 0.1 ha of greenhouses, or a combination different types activities that ensure the production of products not less than the average cost marketable products from 1 hectare of agricultural land. On average, one farm in Germany accounted for 27.4 hectares of agricultural land, and the annual income of a peasant farm was 114 thousand marks.

In Germany, statistics divide peasant farms into two groups:

Group I - farms with the main employment, which provide employment of at least 0.75 average annual worker and at least 50% of family income;

Group II a - farms with additional employment, that is, they are essentially subsidiary.

Germany is a country of predominantly small family farms. Larger farms are located mainly in Schleswig-Holstein and in the east of Lower Saxony. Small farms predominate in Central and Southern Germany.

Agriculture in Poland is characterized by a large heterogeneity in the size of farms: from farms with an area of ​​1 hectare to farms with an area of ​​several thousand hectares. The latter are available in both the private and public sectors. The largest farms were created on the basis of former state agricultural organizations. The problem of fragmentation of farms exists only in the sector of family farms. The average size of an individual Agriculture is 7.5 hectares of agricultural land with a large regional heterogeneity. In the south of Poland, an average farm has about 3.3 hectares, in the northwest - more than 20 hectares of agricultural land. And although the number of farms with an area of ​​more than 10 hectares is only 20%, they use over 60% of agricultural land. The consolidation of farms is a constant process, which is supported by preferential loans.

In Hungary, the number of farmers and small individual farms has increased, but almost half of them work, in essence, as contracting units of the same agricultural cooperatives. This type of relationship between private traders and agricultural organizations, which is not inculcated in Russia, arose in Hungary long before the 1990s. Labor productivity in Hungarian cooperatives has increased dramatically over the past 10 years, while the number of employees has decreased by 3 times. There was no land restitution, as in Germany, but the former owners of the nationalized land received compensation in the form of valuable papers- booms. These bonds could be used to buy land, a shop, a restaurant, and it was also possible to pledge them to a bank. About 40% of the residents who received bonds bought land, some of which were leased to cooperatives and have income from this. The land market is expanding, although there are certain restrictions: the area of ​​private ownership cannot exceed 300 hectares.

Based on the comparative analysis the following conclusions can be drawn.

Market transformations in the countries of Central Europe and the USA led to the modernization of agriculture in favor of farming, but with the preservation of part of the cooperatives (Hungary, Germany). Most successfully, with the growth of labor productivity, the reform of agricultural production was carried out in the Czech Republic, Slovakia, Hungary and in the eastern lands of Germany. But there were also some negative

consequences: the total volume of agro-industrial production as a whole decreased, the number of unemployed increased.

In Russia, the institution of a peasant (farm) economy (hereinafter referred to as the KFH), introduced Civil Code RF in the early 1990s. and enshrined in the Federal Law of June 11, 2003 No. 74-FZ “On Peasant (Farm) Economy”, does not encourage agricultural producers to have the status of this very peasant (farm) economy. It is more profitable for many farmers to work in the form of a personal subsidiary farm than to have the status of a peasant farm, since the management of a commercial private subsidiary farm does not imply the formation financial statements, exempts from paying taxes and state duties, filing a tax return, frees the head of a personal subsidiary plot from paperwork and unnecessary expenses. Basically, peasant farms are registered in the event of the association of several citizens, one of whom becomes the head of the farm.

Eliminating institutional defects by improving legislation would be beneficial for both farmers and the state, since this would eliminate the distortion of statistics. Using the experience of Germany, which adopted the law "On Agricultural Statistics", which regulates the classification of peasant farms into family and farm enterprises depending on the area of ​​agricultural land and the number of farm animals, in Russia it would be possible without special trouble and, with the benefit of the agricultural producer, to transfer large personal subsidiary farms into the category of farms, especially since peasant farms are created in our country without education legal entity.

After analyzing the experience of farming in foreign countries, the author proposes to take three main features as the basis for assessing the value of production in Russian farms:

1) the area of ​​agricultural land;

2) total income;

3) marketability.

The first feature is the area of ​​cultivated agricultural land. The results of the study show that 72.1% of farms in the Republic of Bashkortostan have land plots up to 50 hectares and are small-land enterprises, which occupy only 10.4% of the land area provided for farms. IN

At the same time, in the Republic of Bashkortostan there are large farms with land plots of 200 hectares or more, which account for 8.7% of the total number of farms, but occupy 76.1% of the total land area (Table 1).

According to the size of cultivated land plots, the author proposes to distinguish the following classification groups of peasant farms:

1) small farms - with the size land plot up to 50 ha;

2) medium-sized farms - with the size of the land plot from 51 to 200 hectares;

3) large farms - with the size of the land plot over 200 hectares.

The second feature taken as a basis for determining the size of a farm is the amount of total income.

In the US, small farms are those with sales of up to $100,000 per year. Farms with sales over $250,000 are considered commercial or commercial ($250,000 to $499,000 are medium-sized and over $500,000 are large).

If we apply this scale in Russia when translating at the exchange rate, then for small farmers this corresponds to about 3,000 thousand rubles, for medium ones - from 7,500 to 14,970 thousand rubles, for large ones - over 15,000 thousand rubles. In Russian conditions, this kind of indicators are unattainable even in large agricultural enterprises.

Taking into account the fact that the comparison and application to Russian farming is rather conditional, according to the author, it is advisable to divide farms by total income into three groups:

1) small farms with an income of up to 100 thousand rubles;

2) medium farms with an income of 100,000 to 500,000 rubles;

3) large farms with an income of more than 500 thousand rubles;

Gross income is defined as the farm's annual sales of agricultural products, excluding income from other activities.

Typical KFH average indicators production activities increase with the growth of total income (Table 2). Small and medium-sized farms (59% and 32% of surveyed farms, respectively) are the most common. Large farms account for 9%,

Table 1

Grouping of peasant (farm) holdings by the size of land plots provided in the Republic of Bashkortostan in 2010

Group of farms Number of farms Area of ​​provided land plots

Total In % of the total number of farms Total, ha In % of the area of ​​all farms

Up to 3 ha 192 4.1 311 0.1

4-5 ha 315 6.7 1,433 0.2

6-10 ha 900 19.0 7 111 1.1

11-20 ha 761 16.1 11,926 1.8

21-50 ha 1,264 26.7 46,130 7.2

51-70 ha 315 6.7 18,721 2.9

71-100 ha 255 5.4 22 145 3.4

101-200 ha 313 6.6 46 253 7.2

Over 200 ha 412 8.7 491 192 76.1

Total for all farms... 4,727,100.0 645,222 100.0

A farmer is a specialist who works in the field of agriculture and produces agricultural goods and goods. Employment in this segment will require knowledge in crop production, animal husbandry, poultry farming, etc. So how much does a farmer receive in different countries peace?

Profit of an expert in the territory of the Russian Federation

The average salary of a poultry farmer in the country is 26 500 rubles(about 456 US dollars). The final profit of the representative of agriculture depends on region workplace placement.

The gradation of salaries of specialists has the following picture:

• minimum level- 26,000 rubles / 448 dollars;
• middle line- 87,000 rubles. / 1500 bucks;
• maximum limit- 15 million RUB.

How much does labor cost qualified specialist. Ultimately, the farmer's profit is closely correlated with the industry ( rabbit breeding or vegetable growing) and the scale of employment.

Consider the main options:

• cheese farmer (Pereslavl-Zalessky) - 20,000 rubles. / 344 USD;
• farmer-shepherd-milk - (Ulan-Ude) - from 25,000 RUB / 430 USD;
• growing grain crops - 30,000 rubles and more;
• production of sunflower, flax - from 34 thousand rubles per month.

Working for a farmer for hire does not promise big incomes. So, the employee receives from 21 500 rub. per month(about 370 bucks). A woman who picks potatoes in the central regions of the country earns an average 14 thousand rubles/ 240 bucks.

Price list of specialists in the countries of near and far abroad

Ukraine

The average salary of a poultry farmer in Ukraine is 21 000 hryvnia per month / $778.

The structure of the price range depends on the type of employment and production volumes.

Consider a list:

• minimum degree– 6500 hryvnia / 240 USD;
• maximum level– from 400 thousand UAH / 14 800 dollars;
• average – 14 780 UAH. / 547 bucks.

Mostly farmers in Ukraine have up to 50 hectares of land, which they rent for a long time from states. As a result, when growing cereals and industrial crops specialist makes a profit in the amount 5000 UAH from 1 ha.

Labor emigrants leave to work as farmers abroad with the following earnings:

• assistants in Denmark– 63 000 UAH. / 2333 c.u. per month;
• animal husbandry in Sweden- 58 -64 thousand hryvnia / 2148-2370 USD;
• US ranch helper– from 68 000 UAH / 2518 dollars;
• employment in canada– 65 000 UAH. monthly / $2407;

The process of employment is carried out by specialized labor firms.

Kazakhstan

The level of agriculture in the country is developing dynamically. Large agricultural holdings are located near the territories of large cities ( Shymknet, Karaganda etc.)

The monthly rate of farmers is presented following structure:

• minimum wage- 80,000 tenge / 242 bucks;
• average-150,000 tenge / 454 USD;
• maximum limit– from 6 million tenge / 18 300 USD.

Belarus

Agricultural products in Belarus famous for its quality.

This is especially true for animal husbandry (cattle) and the potato industry.

High-paying places are concentrated nearby Vitebsk, Grodno and Gomel.

Structure of specialists' salaries is represented by:

• minimum wage- 474 b. rubles / 241 US dollars dollar;
• average level- 1260 b. rubles / 643 bucks;
• maximum limit– from 40 thousand BYN / 20 400 USD.

Germany

How much does a farmer earn Germany?

• at the beginning of 1990, an expert earned 1180 € ;
• in 2008, the salary of a specialist in the country was 2350 euro per month;
• Today, the profit of entrepreneurs in the agricultural segment exceeds 4500 euros;
• part-time work with a farmer for students is paid at the level EUR 8.50 at one o'clock. In this case, the employee must know the German language.

Other states of Europe

CRITERIA FOR DETERMINATION
FARMING

As already noted, the laws on land and peasant (farmer) economy were aimed at redistributing land in order to create conditions for the equal development of various forms of farming on land, to create favorable conditions for the formation of a qualitatively new form economic activity- Peasant (farm) economy.

The study of a peasant (farm) economy should begin with the identification of criteria by which this type of management is determined. The classic example of farming is american type, and the first criterion is rate of return. In the United States, a farm is defined as an agricultural enterprise that has a combined annual sales of about $5,000. Americans call such farms amateur farms, their incomes are significantly lower than the average income for the economy as a whole. This group of farmers relies primarily on off-farm employment to earn enough income for their families, incurring an average of $1,500 a year in losses from farming. Such families receive more than 80% of their income from other sources. But even engaging in non-agricultural activities does not provide them with an average income for the country.

According to statistics, farms with annual total sales of less than $40,000 make up 73% of the total number of farms, accounting for less than 15% of the total production of farmers. In terms of profitability, they constitute a group of small farms.

At the other extreme, there are 14% of farms with annual total sales of $100,000 or more. These large commercial farms account for about 71% of total production, and their long-term average net incomes (over $300,000) far exceed those of non-farming families.

Slightly more than 13% of agricultural units are medium-sized farms with an annual volume of 40.00 to 99.99 thousand dollars. Their incomes are comparable to non-farm incomes and are about the same as the average income for the economy as a whole.

As American economists note, significant differences in income greatly complicate farm policy. Providing assistance to small and tiny farms does not bring tangible benefits either to the farmers themselves or to the food market, since the production on these farms is very small. It's about first of all, about those 40% of farms whose total sales do not exceed 5 thousand dollars, and the production is only 3.6% of the total farm products. If we move these human and material resources from agriculture to other sectors, then there will not be a significant reduction in the total volume of agricultural production.

Farmers whose incomes exceed $100,000 do not need subsidies in the long run, but they face serious problems of income instability in short term. Medium-sized farms face two problems at the same time: low income levels and volatility. They need support in both the short and long term.

The situation with profitability in the agricultural sector shows that the market system is unable to solve the farming problem by redistributing excess resources from agriculture. This means that state intervention is required. What should be the state agrarian policy in these conditions? Let us turn to the American experience of state regulation of agriculture in another question.

The profitability criterion is also applicable to Russian farmers. According to this criterion, farming should include a farm that supplies products to the market per year for at least 25,773 rubles. It is believed that in physical terms, the farm should supply the market with at least three tons of vegetables and potatoes, 0.3 tons of grain, 0.3 tons of meat.

Farms whose annual income does not exceed 34 thousand rubles, as a rule, are not engaged in commodity production, their income from agricultural activities is below the average for the economy as a whole.

The structure of peasant (farmer) households is presented in Table 3.

Table 3

According to statistics, almost a third of farms used all the grain produced for personal consumption, more than half of the farmers did not sell livestock and poultry for slaughter.

Many such farmers, along with production, are engaged in non-agricultural activities, as evidenced by the data in Table 4.

Table 4

Farms that are large by Russian standards are those that produce products worth 157,000 rubles or more. These business units account for 3.6% and their income is 4.5 times higher than the average income in the economy.

The problem of small and tiny farms in Russia, as well as in the United States, is to move the resources involved in them from agriculture to other industries, but even in our country it cannot be solved with the help of a market system.

It is not always possible to separate farms with low incomes from agricultural activities from small-peasant farms (personal subsidiary farms), therefore, statistics often classify small-peasant farms as a group of farms. In addition, the number of holdings is counted on the basis of their registration, and many registered holdings are known to remain so only on paper.

Naturally, the question arises: on which of the three groups should society primarily rely, meaning the achievement of high economic results and the rational, efficient use of land? The unequivocal answer is: to strong, "hard-working" owners. P. Stolypin proceeded from this essentially elementary truth, substantiating and implementing the strategy and tactics of the agrarian reform. Later, during the NEP period, the slogan of relying on a cultural "single" owner with voluntary cooperation of the peasants was put forward. However, both then and in our time, the problem of state farm policy in relation to different groups of farmers remains unresolved.

Another criterion for determining farming is availability of cultivated land. The average land area of ​​one farm in the USA is 187, in Germany - 120 hectares.

There is no need to prove that farm income and the amount of land used are in close relationship, which is confirmed by the data in table 5.

Table 5

Large income farms account for only 14% of the total number of farms and cultivate 50% of the agricultural land, while 71% of small and tiny farms occupy 27% of the total agricultural land. The average size of a small farm does not exceed 81 hectares of land, which is 2.3 times less than the average farm size in the country and 8.6 times less than the average size of a large farm.

In Russia, as of January 1, 2000, one farm had an average of 55 hectares of land, and as of January 1, 2001, already 58 hectares. In the Krasnoyarsk Territory the average size peasant (farm) economy as of January 1, 2000 was 55 hectares, 2001 - 57 hectares, 2002 - 62 hectares. Thus, there is an increase in the size of land plots both in the country and in the region. In general, the share of farmers in the country accounts for 4.8% of the used land, and in the region - 4.1%.

However, there are significant differences in land distribution between farms, as shown in Table 6.

Table 6

The table shows that there are many small-scale farms in the country: 82.1% of farmers concentrate only 26.4% of the provided land, while 17.9% - 73.6%. There is a trend that large-scale peasant (farm) farms with 100-200 hectares of land or more are developing sustainably. The level of marketability of production in them is 50% and above.

A significant part of the farmers lack not so much the amount of land as their quality, that is, a convenient location and fertility and the ability to cultivate their plots.

Only 55% of farms have fully developed and planted their plots, and 24% of farmers have used the land less than half. The main reason why farmers did not carry out sowing work is the lack of Money for the purchase of seeds, fertilizers, equipment, payment for services and work on the cultivation of fields.

The crisis situation in the country, which has narrowed the financial and resource base of the village, creates extremely unfavorable conditions for the economic realization of the right to private land ownership both in private farms and in collective farms.

It must be assumed that with the democratization of land relations and the development of non-agricultural sectors of the economy, some farmers will leave the land in search of a better alternative use, and the process of land concentration will go faster.

The problem of democratization of land relations in the most general terms is reduced to the problem of the formation of a land market. In the last two years, a sharp discussion has unfolded in society on land market issues. In this regard, in this work there is a need to present the course of the discussion and some of its results, reflected in the recently adopted new Land Code of the country and federal law"On the turnover of agricultural land".

The third criterion of farming is one or another form of ownership of reproducible means of production. According to this criterion, farms are divided into family and partnership. The first unite financial resources and property of one family, the second - of several partner families.

In the Law of the Russian Federation "On the peasant (farm) economy" in Art. 1. such type of economy is defined as an independent economic entity with the rights of a legal entity, represented by an individual citizen, family or group of persons, engaged in the production, processing and sale of agricultural products.

Both family farms and partnerships use personal labor, however, the use of hired labor on farms on a temporary or permanent basis is not excluded. Farmers using hired labor represent capitalist-type farms.

IN developed countries the predominant form of agricultural enterprise is the family farm, based primarily on family labor, using own funds production.

Nevertheless, in countries with a predominance of large farms, the use of hired labor is quite common. So, in the UK, employees account for more than 1/3 of all employed in the agricultural sector, in the USA - just over 30%, in Australia - 26%, in Denmark, the Netherlands and France - 10-15%.

As of January 1, 2001, there were 261.7 thousand family farms in Russia, and 3,751 in the Krasnoyarsk Territory, while there is no data on partner formations.

Surveys of farmers show that most of them manage their production activities on their own, only a few use hired labor, on average, there is one hired worker per farm. Employment of labor, as a rule, is carried out for seasonal work. So, farmers and members of their families worked 143 days a year, and employees - 44.

The fourth criterion for farming is purpose of agricultural activity. It is known that the purpose of any business is to make a profit. With regard to an agricultural firm, two goals are possible: for a small-scale business - the satisfaction of personal, family and intra-economic needs; the owners of large commodity firms are entirely working for the market, striving to increase authorized capital by investing part of the profits, they choose an economically efficient specialization of production, a combination of industries, introduce intensive methods, achieve a growing competitiveness of their products, etc.

A farm is an agricultural enterprise operating on private and/or leased land, using family and/or hired labor, and producing agricultural products for sale on the market in order to satisfy personal and production needs.

In the literature there are the concepts of "farm" and "peasant" economy. These concepts arose and are historically associated with two paths of development of capitalism in agriculture: American and Prussian.

The fast way of transition of agriculture from subsistence to commodity is called American, and the slow way is called Prussian. Hence the terminology. An agricultural enterprise in the USA is a farm, and in Germany it is a peasant farm. The owner of a farm is called a farmer, and the owner of a peasant farm is called a Bauer (peasant). Now there is no significant difference between farming and peasant farming. Although the Law of Ukraine "On farming (peasant) economy" fixes these terms.

Prices for agricultural products show a downward trend relative to other prices. This is evidenced by the data of world markets over the past 100 years. However, what is the reason for this process? Such an argument is possible.

Under the influence of a natural increase in the productivity of agricultural production, the supply curve of its products shifts to the right. However, the growth of production is faced with inelastic (both in price and income) demand - and a fall in the relative prices of agricultural products becomes inevitable.

Let's consider the main milestones in the dynamics of world prices for agricultural products.

In the middle of the 19th century, prices for agricultural products, in particular for grain, were stable and relatively low due to the fact that the governments of European countries abolished import duties. Perhaps because world trade agricultural production at that time was still not very significant. However, since 1870, US grain exports have grown rapidly. In addition, grain exports from Russia, Canada and Australia are growing. As a result, in 1895 the price of grain in Europe fell by half. This situation threatened national production and therefore at the end of the 19th century. governments are resorting to a resurgence of agricultural protectionism.

Almost all European countries introduce increased duties on the main types of agricultural products. Protectionist measures somewhat slowed down the fall in prices, but did not completely stop this process.

During World War I, the demand for food increased. As a result, prices are rising. In the post-war period, agricultural production gradually increases and prices fall. By the middle of 1929, world wheat reserves amounted to 28 million tons, which exceeded the world annual export. Exporting countries were forced to get rid of excess stocks at dumping prices, resulting in 1932. Wheat prices are almost halved. Governments once again resort to protectionism and, before World War II, grain prices return to pre-Depression levels.

In the last 50 years, prices for agricultural products have been increasing slightly. However, this growth is a consequence of state rather than market regulation of the development of the agricultural sector.

In a normal situation, an increase in price leads to an increase in the quantity supplied and a decrease in the quantity demanded, and vice versa. These two quantities may be in balance. However, this is not required.

An example of market disequilibrium, characteristic of some agricultural products, is cyclical fluctuations around the equilibrium point.

Cyclic fluctuations can occur under the following circumstances:

a) there are so many producers that each of them has little influence on all. This is exactly the situation in agriculture;

b) there is a certain delay, more or less the same for. all producers, between the adoption of production decisions and the corresponding changes in the volume of production. For agricultural crops, this delay is one year, for garden crops (apple, pear, cherry, etc.) - 5-7 years, in pig breeding - less than a year, in beef cattle breeding - 1.5-2 years, etc. ;

c) if a product is produced that quickly deteriorates, then it should be sold in the near future. It is unprofitable to regulate the supply of such products by warehousing them. This is the basis for cyclicality;

d) production decisions are greatly influenced by current prices. However, each manufacturer acts pragmatically. There would be no cycle if most manufacturers acted rationally. In a typical cycle, initially high prices stimulate bullish manufacturing solutions most manufacturers. As a result, the market supply increases sharply, prices fall. Under this circumstance, most manufacturers decide to reduce production. A drop in supply leads to a new price increase, and so on.

Graphically, this process of cyclic oscillations around the equilibrium point is illustrated in Fig. one.

On fig. 1 shows that over time 1 the price P and the output Q periodically change in opposite directions. The duration of the cycle from one peak to the next is two production periods, i.e. two years for cereals.

In a traditional price-output chart (Figure 2), an increase in price first causes an increase in output. Further, this volume becomes excessive relative to

Rice. 1. Cobweb-like model of time cyclicity of price P and production volumes Q

Rice. 2. Web pattern: repeat cycle

Rice. 3. Cobweb Model: Converging Cycle

Rice. 4. Web-like model: divergent cycle

demand - the price falls. Then production is reduced and a new cycle begins.

Depending on the ratio of the slopes of the supply and demand curves, the cycle can coincide (fade out) (Fig. 3) or scatter (increase) (Fig. 4).

Graphs in fig. C 4 show dependence: than more demand inelastic with respect to supply, the more likely it is that the cycle will divergent.

Markets for fruits, vegetables, pork, lamb, poultry, eggs and the like tend to be cyclical. However, cyclical phenomena do not occur in the markets of grain, milk, etc.

In advanced agriculture, the basic production unit is the family farm.

Family farms can be so small that there is not enough income for the family. So family members try to look extra work within the farm: rent rooms to tourists, provide parking spaces, etc.

There is evidence that owners of family farms in the EU receive a third of their income from the farm. The low income of the farmer limits the hiring of labor, although he partially hires workers for seasonal work(harvest of grapes, hops, strawberries, cherries, strawberries, citrus fruits).

On the big salary hired agricultural workers do not calculate: on average, their salary is 3/4 of the wage level of an industrial worker. The reasons for this are as follows:

a) agricultural workers are little mobile and relatively redundant due to the mechanization of production;

b) agricultural workers accept lower wages because they get non-standard, creative, different, non-monotonous, responsible work;

c) have free access to agricultural products (you can eat)

d) get cheap housing along with work. Concerning small farms that carry out simple reproduction, the Russian professor A. Chayanov concluded that an increase in the price of a product can, starting from a certain moment, cause a drop in the supply.

In this regard, the individual supply curve will have a curved shape (Fig. 5).

Rice. 5. Curved small farmer supply curve

The price rises from P1 to P2, and the volume of an individual offer, instead of increasing, decreases from Q1 to Q2.

IN this case profit is not maximized, but revenue (total income) increases. This conclusion is clear, since the area of ​​rectangle A, which shows the increase in revenue from a price increase, is larger than the area of ​​rectangle B, which shows the loss of revenue from a decrease in the quantity supplied.

If the supply curve of an individual farm can sometimes be bent, then the supply curve of an industry cannot be. In any case, there is no empirical confirmation of such a phenomenon. An increase in prices always causes an increase in the quantity supplied, and it is very difficult to separate the movement along the supply curve from the displacement of the curve itself as a result of, for example, improvements in technology.

Some farm income data is published regularly in the USDA's monthly AgricuItural Outlook. The Ministry publishes more complete information in the yearbook ((National Financial Summary".

It should be noted that the average income per farming household cannot be calculated by dividing the total income of the agricultural sector by the number of farms. A significant part of the income of this sector is received by non-farm enterprises, especially those that transport and sell products produced by farmers (pigs, chickens, vegetables, etc.) and supply some inputs to farmers (feed, seeds, fertilizers, etc.). In addition, the income of one farm can be shared among several households. In this regard, the analysis carried out by K. McConnell and S. Brew in their textbook "Economics" is not entirely correct.

Prices and incomes are a pressing issue for farmers. Let us consider this in more detail, using the tools of microeconomic analysis.

Comparing the incomes of farmers and non-farmers reveals several important points.

• 1. Historically, comparatively low incomes have been the clearest sign of a farming problem. In the past, farmers' incomes were usually much smaller than non-farm incomes. For example, in the early 1960s, farm income was only about ¼ of the income of non-farmers. In the early 1980s, the ratio of farm to non-farm income again fluctuated around 80%.
• 2. In last years the gap between farm and non-farm incomes has narrowed. Indeed, during the agricultural "boom" of the mid-1970s, farm family incomes actually exceeded those of non-farm families. The situation has been the same in recent years. For example, in 1985 the average income of farm families was $29,436. compared with the national average - 29066 dollars. The corresponding figures for 1986 are $34,305. for farmers and 30759 dollars. for the economy as a whole. It should be noted, however, that a significant portion of farm income is the result of government subsidies.
• 3. As both the above comment and our previous discussion of the history of the farm problem show, farm incomes are much more volatile than non-farm incomes.
• 4. Although farm and non-farm incomes have been quite comparable in recent years, farm incomes are very unevenly distributed. We therefore find that in 1986 about 20% of the farming population lived in poverty, compared with less than 14% for the economy as a whole.
• 5. The improvement in the well-being of farm families compared to non-farm families in a historical context mainly reflects the increase in income of farm families from non-agricultural activities. This means that many farm families, especially families with low farm incomes, also receive significant income from off-farm work. If you look at the end of columns 5 and 6 of Table 1, you will notice that in 1987 the average farm income per farm was $21,545. (below the national average), but the average income from receipts from all sources (agricultural plus non-agricultural production) was $43,037. This latter figure was above the national average. Columns 5 and 6 of Table 1 also show that the four lowest income groups (all farms with annual total sales of less than $40,000) received most of their income from non-agricultural productive activities.

Let's take a closer look at Table 1 to appreciate the large income disparities that exist in agriculture. In fact, in the farming sector there are three absolutely different groups farms.

Group 1. Out of 2.2 million farms in the country, 14% of farms with annual cumulative sales of 100 thousand dollars. and above accounted for about 71% of total production. These large commercial farms earn long-run average incomes that are much higher than non-farm households, as column 6 of Table 1 shows.

Group 2. At the other extreme are those 1.6 million farms whose combined annual sales do not reach $40,000. Although they make up about 73% of the total number of farms, they account for less than 15% of the total production of farmers. These farms are essentially rural homes, or so-called amateur farms, and are too small to provide sufficient income for a family. Such families rely mainly on off-farm employment for income. As column 5 of Table 1 shows, most of these farms earn negligible or even negative income from farming. Average income this group is well below the median income for the economy as a whole.

Group 3. About 286,000 farms fall into the category of farms with combined sales of $40,000 to $100,000. Their share is about 13% of the total number of farms, and their owners receive about 14% of total farm income. Although such farms tend to absorb all the time of their owners, they are too small to generate income comparable to non-farm incomes. The average income from farming on Group 3 farms in 1987 was $1X713. compared with 30853 dollars. for the economy as a whole.

At the risk of getting ahead of ourselves, we note that these differences greatly complicate farm policy. There is little or no point in formulating programs to meet the perceived needs of the "typical" farming family. Group 1 large farms do not need subsidies in the long run, but, as we shall see, they do face serious short-term income volatility problems. Group 2 small farms do not benefit much from current farming policies, as the share of subsidies in farm income varies with production, and production on these farms is very low. In fact, the existence of this group means that a significant amount of human and material resources could be shifted out of agriculture without causing a significant reduction in total agricultural production.

It is interesting to note from table 1 that the total sales of almost 40% of all farms do not exceed 5 thousand dollars, and their production is only 3.6% of the total farm production! The labor force training system and overall macroeconomic prosperity may be more important than farm policy in raising this group's relatively low incomes. Medium-sized farms in Group 3 face both low income and income volatility at the same time.