Economic Information Bulletin No. (EIB-101) 36 pp

October 2012

Multi-Enterprising Farm Households: The Importance of Their Alternative Business Ventures in the Rural Economy

Almost a third of U.S. farm households generate income by engaging in business ventures independent of commodity production, with distinctly different community and household benefits. In 2007, 686,600 farm households engaged in 791,000 income-generating activities distinct from commodity production, creating $26.7 billion in household income. Onfarm diversification activities like agritourism and off-farm business ventures each accounted for about half of these activities, but off-farm businesses generated about 80 percent of total alternative (i.e., noncommodity) business income earned by farm households, creating the largest impact on the local economy. Off-farm businesses operated by farm households contributed an estimated $54.6 billion in value-added income to the gross regional products of their local economies and paid out $24.5 billion in wages and salaries to 853,100 part-time and full-time employees. In general, the share of the local employment base accounted for by farmer-owned off-farm businesses was higher in more rural counties.

Keywords: onfarm diversification, off-farm businesses, portfolio entrepreneur, farm household typology, nonfarm employment, direct sales

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