VERY SMALL FARM HOLDINGS AND THE RURAL ECONOMY MARTIN M. TURNER*

Identifying the sector

The existence within the total population of British farms of a group of very small farms is not a new phenomenon, and their role within the agricultural sector has been a subject for research and debate and, sub- sequently, administrative and policy decisions over many years. The agricultural censuses of 1907 and 1911 invited each occupier to ‘state if he did not occupy his land for business purposes or as a source of income’. The Board of Agriculture and Fisheries (1907: 7) justified this additional question thus:

‘ I t has frequently been pointed out that the Agricultural Returns necessarily com- prise a certain proportion of holdings which can scarcely be regarded as being occupied for the primary object of farming as a source of profit, bur may be considered rather as appendages to a residence which increase its amenities 3nd provide occupation and interest to persons whose principal avocations lie in other directions ... it could not fail to be of interest if it were possible to differenriate the two classes, o r at least be able to form some estimate of the deduction which should be made from the total Returns in respect of those by whom the occupation of land is regarded as a matter of comparative unimportance in a pecuniary sense’.

The 1907 census identified nearly 6% of UK holdings which, under the foregoing definition, were not farmed primarily for business or income. After 191 1 there seems to have been little official interest in the subject until, under the exigencies of wartime food production and planning, the 1941/43 National Farm Survey included within its assessment of holdings whether the occupier was fully engaged in farming or dependent on it for a living. It was found that 5% of holdings of 5 acres or more were not being ‘farmed for business’. Later, the Small Farmer’s Scheme (1959) aimed to develop and strengthen ‘viable’ small farms and the threshold for eligi- bility was set at the equivalent of one full-time worker (275 standard man days o r smd), derived from combining standard labour coefficients with census details of stock and cropping. Using this classification system the Ministry of Agriculture found that in 1955 nearly half of the 370 000 agricultural holdings in England and Wales were ‘part-time’ (Ashton & Cracknell 1961). A subsequent survey showed that many occupants of these holdings had other full-time (23%) or part-time (7%) jobs or other

* Agricultural Economics Unit, University of Exeter, United Kingdom

Sociologia Ruralis 1991. Vol. XXXI-I

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sources of income (16%). As Ashton and Cracknell recognized, any division of holdings into

full-time and part-time using the census data approach holds true only for the existing standard of management. They pointed out that in addition to management ability the occupier’s objectives are also a major determinant of holding status in such a classification system. Essentially, the classifica- tion simply identifies holdings which are currently being operated as part-time units, rather than being incapable (given their present resources) of providing a full-time living. Clearly, any such grouping is valid only for the existing collection of resources or, even, only for the management objectives of the present occupier; the resource base of the holding may be either supplemented or dispersed in the future. Such classifications of holdings, therefore, are inherently transient ‘snapshots’ rather than being definitive descriptions of the component units of the national farm. There is a dynamic aspect which is critical to any understanding of the nature and the role of the small farm sector.

This review of what may be termed official British definitions of part-time farms (and, ergo, part-time farming) prompts the question of what exactly is (or should be) the focus of interest in farm studies. Is the prime interest, from both agricultural and rural policy perspectives, hold- ings (which may be regarded merely as arbitrarily-defined accounting units) or people (who have recognizably diverse economic and social objectives and less apparent permanence)? Notwithstanding the adminis- trative convenience of the former, it is surely the case that from a sectoral standpoint, and certainly from a regional development perspective, the primary interest is in how and what the land is used for rather than in which particular bundles it is farmed, and in the gains or returns to the labour resources in particular. O n this premise, holdings per se are less important than the farm family, itself a major constituent of and influence on the rural household; of these, those operating very small farms form one important group.

It is important here to clarify the respective definitions of part-time farming, part-time holdings and very small farms. Part-time farming, defined by Gasson (1988) as the ‘the combination of farming with other paid work’ (i.e. people-oriented) can and does occur across the spectrum of farm types and sizes. Ashton and Cracknell(l961) defined as part-time holdings (i.e. land unit oriented) those which were below 275 standard man days given present levels of stocking and cropping. Gasson argues cogently that definitions of part-time farming based on sub-viable hold- ings or use of an occupier’s time, though appropriate when agricultural policy was directed to improving resource productivity, are less suitable in an era when income and welfare considerations of farm families are the major concern of policy. Accordingly, she defines a part-time farm as one

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‘run by a part-time farming family or household’ whose members ‘com- bine other paid work with farming’. It has been argued that this definition is so broad (in its inclusion of other members of the farm household) that insights into the primary unit, the farm family, are blurred - although Gasson recognizes this and questions the relevance of even greater breadth in some American studies.

For a series of studies carried out in England and Wales between 1987 and 1990 an updated version of the Ashton and Cracknell definition was used to identify what were termed ‘Very Small Farms’, but the focus of interest included the farm family. The Ministry of Agriculture’s size of business classification system uses British Size Units (BSU)’, under which very small farms (or part-time holdings under a holding-oriented ap- proach) are those with a calculated value of less than 4 BSU. Similarly, larger holdings are grouped as small (4 to 16 BSU), medium (16 to 40 BSU), and large (above 40 BSU). These are all main holdings. At the time the survey sample for these studies was drawn there were an estimated 58 000 mino? holdings on which, for the most part, agricultural activity was likely to be minimal (Davies & Whittaker 1983).

Using the BSU classification system, 71 000 very small farms were identified in England and Wales in 1986. They represented almost three out of ten agricultural holdings or, with minor holdings excluded, 38.5% of all main holdings. The focus of the next section of this paper is the farm families on those agricultural holdings which come within the scope of the annual census and which are too small to be regarded as full-time, but which are recognized nevertheless as a genuine component of the agricul- tural resource base.

Empirical results

The survey results establish in some detail the current utilization of these very small farm holdings in terms not only of the agricultural activities conducted, and the production patterns and resulting levels of output, inputs and farming incomes, but also the total income status of the farm family and their objectives and aspirations as related to the holding. The four stage survey relates to the calendar years 1986 to 1989, with the first two years forming effectively a pilot survey being based on a much smaller sample. Fieldwork for 1989 has been completed only recently and results, including those for a range of socio-economic questions, are not yet available. This section deals mainly with the results obtained in 1988 on a sample of 1217 holdings in England and Wales, with some supplementary information obtained from the 1987 study.

Detailed financial results for the England and Wales samples are avail- able elsewhere (Ansell, Giles & Rendell 1990) but the average occupier’s income and recorded labour input are shown in Table 1. The tremendous

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variation in both the scale and direction of farming activities which the study identified on these holdings is obviously a major influence on the level of income obtained. Nevertheless, taking first the overall sample averages it is evident that farm activities (on some 11 ha) contributed barely a thousand pounds to Occupier’s Income, less than a twelfth of total income. However the study found that jointly the farmer and spouse put half their working time into farming activities on the holding, with total work input amounting to perhaps 1.25 full-time equivalents (2425 hours).

Table 1. Very small farms in England and Wales: occupier’s income and labour input for on- and off-farm actiuzttes, 1988

P per holding Yo of total Occupier’s income - farming 995 7.8

- non-farming 11803 -total 12798

92.2 100.0

Hours Yo of total Farmer & spouse labour - on-farm 1198 49.4

-total 2425 100.0 - off-farm 1227 50.6

Source: Calculated from data in D.J. ANSELL, A.K. G ~ L E S & J. REWELL (1990)

Table 2. Very small farms in England and Wales: income and labour distributions by type of farming group, 1988

Occupier’s Income (E) Farmer & spouse labour (hrs)

Type of farming Farming Non Total On farm Off farm Total farming

Dairying 4521 5820 10341 1673 617 Hill 8: upland livestock 998 8596 9594 1241 1191 Lowland livestock 780 14673 15453 1362 1367 Cropping 875 7396 8271 1178 1502 Pigs & poultry 1558 10804 12362 1599 1230 Horticulture 1290 10054 11344 2173 93 1 Ocher types 683 13163 13846 434 1186

Source: Calculated from data in D.F. ANSELL, A.K. GILES & J. RENDELL (1990)

2290 2432 2729 2680 2829 3104 1620

The analysis of results by broad farming type (Table 2) shows that for one group, those with dairying, the farming activities were more demanding of time and made a much more substantial contribution to total income (some 44%). Two groups stand out in different ways for the low impor- tance of farming income within total income. O n lowland livestock holdings farming income forms 5% of the total but involves half total

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labour, whilst on those termed ‘other types’ farming income contributed a similar proportion (5%) but required only a quarter of the total working time of farmer and spouse. Other groups were between these extremes in both labour and income terms, with the not unexpected disparities in both total income and total labour providing evidence of differing circum- stances between holdings.

Whilst the analysis of results by broad farming type provides a structure and highlights some of the variation which exists, even so the group averages conceal very marked differences between individual holdings and occupiers indicative of the wide diversity which Gasson (1986) de- scribed as one of the most striking features of part-time farming (see also Davies & Whittaker 1983). Within the overall sample a t least three broad groups of occupiers can be identified:

a. Retired (full-time) farmers or farmer’s widows occupying either the ‘rump’ of their original farm or living on a small holding bought for retirement;

b. Those (frequently incomers) for whom a rural home and lifestyle is important, with the residential aspect of the holding very significant. This grouping may be sub-divided between those with very little interest in use of the land and those with a definite, though hobby, interest ;

c. Occupiers who have a committed interest in using the holding for farming purposes as effectively as possible. Again a sub-division is possible between those for whom farming represents the main (or even only) source of livelihood and those where food production, often using organic principles and methods, is combined with other off-farm employment.

These categories are not intended to be mutually exclusive but are suggest- ed to give some indication of the wide variety of occupiers and conse- quently, of their motivation and aspirations. A few cases of rural poverty were found, mainly among those for whom farming formed their main income-generating activity, some of whom had started with hopes of eventually becoming full-time farmers on a larger scale. The general impression, however, is of comfortable though not extravagant living standards with considerable amenity benefits. The sources of off-farm income were extremely varied and frequently relate to the husband, with the wife being responsible for farming policy and often the bulk of the farm work. In South West England, for example, nearly one in five of respondent farmers were female (Turner 1990).

Table 3 lists the main sources of earned and unearned income by type of farming group. Professional occupations were very prominent among both employment and self-employment categories of earned income, with

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pensions ahead of investments as the main source of unearned income. This reflects in p a n the age structure of these farmers, with more than a third over the age of 50 and 16% over 65 years old. Despite the generally low levels of income obtained from farming many occupiers still tended to regard income as an important objective (Table 4). Asked about their main present objectives ‘to provide a significant source of income’ was the most frequently given response in five of the seven farming type groups, coming second to combined residentiaUhobby use on cropping farms, but very infrequently mentioned o n those termed ‘other types’ - essentially holdings with little or n o agricultural activity.

Table 3. Very smaNfarms zn Englandand Wales: rnaznsourcesof earnedand unearnedincome by type of farming group, 1987

Earned income Unearned

Type of farming Employment Self-employment income

Dairying Professional (44%) Other manual (66%) Pensions (61 Yo) Hill & u land Irvestocf: Professional (56%) Other manual (58%) Pensions (64%)

Lowland livestock Professional (62%) Professional (38%) Investments (67%) Cropping Other manual (35%) Professional (52%) Pensions (61‘%) Pigs & poultry Professional (78%) Managerial (48%) Pensions (47%) Horticulture Professional (79%) Professional (70%) Investments (50%) Other types Professional (88%) Professional (74%) Investments (62%)

Source: Calculated from data in D.J. ANSLLL. A.K. G I L ~ \ & J. R ~ Y D E L L (1989)

Table 4. Very small farms in England and Wales: main present objectives and changes from initial objectives of occupiers by type of farming group, 1987

Change in objectives Main present YO of objective holdings Biggest increase Biggest decrease

Dairying Income 48 Resid./hobby Income Hill & upland livestock Income 40 Residential Income Lowland livestock Income 42 Residential Income Cropping Residlhobby 31 Residential Income Pigs & poultry Income 37 Residlother Income Horriculture Income 47 ResidJhobby Income Other types Residential 49 Residential Income

Source: Calculated from data in D.J. ANSELL, A.K. GILES & J. RENDELL (1989)

Consistent changes in objectives over the period of occupation were found, however, with a marked decrease in ‘income’ oriented objectives and a related increase in importance of ‘residential’ objectives. From anecdotal evidence there would appear to be two main underlying factors involved: first, with increasing age and poorer health it is entirely predict- able that in some instances income objectives become less important (on

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‘retirement’ holdings, for example). Secondly, there is little doubt that some occupiers, attracted to a very small farm initially, perhaps, by the media image of gentle country living, find the dissonance between their dreams and the reality of farming on this scale (poor incomes from long hours of manual work) too harsh or financially untenable and sell up. Nearly all of these holdings were wholly or mainly owner-occupied and, in some areas at least, there appears to be a considerable turnover in occupancy.

Some sectoral concepts

The questions to be addressed in assessing the role of these holdings within the wider rural economy are (a) their contribution to the output and resource use of the agricultural sector, (b) the contribution of agricul- tural activity to their income and employment and (c) their case for being a focus of interest or concern in either agricultural policy or rural social policy. This final section attempts to set the study results in this broader context.

Farming on these very small farm holdings has wider and more far- reaching social and economic implications than agricultural relevance. Although these holdings comprise about four out of ten main farm holdings their contribution to the agricultural economy, both in aggregate and on a local or regional basis, is little more than negligible. Despite their numerical importance for the United Kingdom as a whole, including similar holdings in Northern Ireland where they are a much more signif- icant feature of agriculture (Moss 1986), they contribute some 2.6% of total standard gross margin. There is no doubt that on most of these holdings the familiar criticisms of small scale farming, focusing on per- ceived economic inefficiencies, can and do apply. The study results lend support to the conventional, even classic, view regarding the high costs of producing in small units, with consequent wastage through underuti- lization of labour, land and (almost certainly) capital resources.

It may well be that some of these resources, particularly labour, have a low opportunity cost under certain spatial conditions. Indeed, the main alternative use for the almost entirely family labour involved on these holdings could be leisure, particularly in the case of the older farm families. Certainly resource immobility is associated with these holdings, since it appears that the cushioning effect of substantial off-farm income blurs market signals thus conspiring to hold these resources in this sector. Some, at least, of these farmers hold on to their farms in spite of low or negative returns thus preventing efficient, dynamic, bona fide full-time farmers from enlarging their operations.

The case of these holdings (or, more precisely, their occupiers) for being a valid focus of policy interest, therefore, does not rest on their role within

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agriculture (which is, at best, marginal) nor on the significance of agricul- ture in their overall income (it remains a small, though sometimes impor- tant and often desired, component of income). Any specific policy focus must rest on their role within rural society and the rural economy. The diversity of background of these farmers bears testimony to the powerful pressures which underlie immigration from towns and cities to rural areas. As Jones (1973) put it ‘The rural myth has been fondly nurtured for many decades, supported by many social and commercial devices’ which has led to the development of a sentimental view of rural life which often bears little resemblance to the true situation. More recently this has been influenced by increasing interest by towndwellers in ‘a less polluted environment, pleasanter landscape, low rents, houses to renovate, land for building and a better quality of life in general’ (EC 1988). All of these and other similar factors were mentioned by ‘incomer’ occupiers of very small farms.

In several regions of England and Wales there are now well established trends for rural immigration which are particularly marked in East Anglia, the South West, the East Midlands and Wales (EC 1988). This rural immigration has resulted from economic factors as well as desire for a changed way of life, along with improvements in the rural infrastructure particularly of transport and communications. These trends are unlikely to be reversed for many years, if a t all. Where they coexist with sustained economic pressures on full-time farming, which are acting to reduce the number and vitality of many full-time farms at the smaller end of the scale (say, between 4 and 8 BSU), they can be expected to result in increasing numbers of ‘very small farms’ as marginal full-time holdings are dis- persed, on retirement or forced withdrawal from farming, into one or more very small farm units with a consequent enlargement of neigh- bouring full-time farms.

This suggests that although the agricultural role of very small farms may alter little, their social role and place within the rural economy, particular- ly on a regional basis, can be expected to grow. Certainly these very small farms should be divorced from any consideration of structural policies designed to alleviate the farm income problem. In any case, structural policy effectively treats the cause rather than the symptom of the farm income problem, in that it focuses on the relative immobility of farm labour in its lagged adjustment to agriculture’s declining share of national income, the principal cause of income disparity between farm and non- farm occupations (Revel1 1985). As these studies have shown, the occu- piers of very small farms are, in general, there for different reasons and are probably well able to respond to market pressures where they choose to do so. They are a very distinct group who should not be included within the ‘farm income problem’ equation. There is no need or justification for these holdings - or their occupiers - to become afocus of policy interest or

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of support: in this respect, a t least, the market is handling the situation very well.

The role of very small farms’ occupiers within rural society can be seen as essentially beneficial. The majority of them are far from being failed farmers o r ignorant amateurs, the rather dismal epithets sometimes en- countered. Moreover, the bare financial results of the very small farms study fail perhaps to do justice to a diverse group which includes within it some very able, committed agriculturalists often coming from very differ- ent backgrounds and careers. The influx of new ideas, talent and enthusi- asm which at least this group of ‘very small farms’ occupiers represents can only benefit both farming and rural life. At a recent conference the potential role of such incomers (not all of whom, of course, occupy a very small farm) was recognized, with regard to both the provision of services (Hadley 1990) and in rural economic development (Kirk 1990). Harri- son’s (1984) challenge to agricultural economists to broaden the scope of farm income studies so that questions - and answers - are no longer restricted to what happens inside the farm boundary (however the farm is defined) deserves to be repeated in the context of rural economic devel- opment, where the future role of very small farms is likely to lie.

Notes 1 . One BSU is equal to2000 European Currency Unitsof Standard Gross Margin (SGM) at

average 1978-1980 value (equivalent to about €1300). The total SGM of each farm is calculated by applying appropriate SGM coefficients LO the livestock and crops on the holding on the 1st June.

2. To be considered ‘minor’ a holding must satisfy all of the following: - - - - -

total area of the holding less than 6 hectares no regular whole-time farmer or worker on the holding an annual labour requirement of less than 100 standard man days glasshouse area of less than 100 square metres the occupier does not farm another holding

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ANSELL, D.J., A.K. GILES & J. RENDELL (1990), The Economics of Very S m d Farms - A Further Look. Special Studies in Agricultural Economics, Report No 9 (Reading: University of Reading, Department of Agricultural Economics and Management)

ASHTON, J. & B.E. CRACKNELL (1961). Agricultural holdings and farm business structure in England and Wales, Journal ofAgricufturuf Economics, XIV (4): 472-500

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GASSON, R. (1986), Part-time farming: its place in the snucture of agriculture, in G. C o x , P. LOWE, & M. WINTER (eds.), Agriculture: People and Policles (London: Allen and Unwin)

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HARRISON, A. (1984), Part-time farming: an elementary economics approach, in D. AGOSTI- N I & A. MAUNDER (eds.), MixedIncome Farming (Oxford: University of Oxford, Institute of AgricuIrural Economics)

JONES, G.E. (1973). Rurul Life: Patterns and Processes (London: Longman Group) KIRK, D. (1990), Rural enterprise: assistance through public and private partnership, in

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TURNER, M.M. (1 990), Very Small Farms - A South West Study, Briefins Paper 1 /90 (Exerer : University of Exeter, Agricultural Economics Unit)