CORPORATIONS IN FARMING 

The Congress of the United States 

Congressional Budget Office 

A Staff Working Paper 
PREFACE 

Corporations have been involved in farming for many years and their 

numbers are on the rise. But most farms are still operated as sole 

proprietors and partnerships. Today there is concern that large corporations 

with nonfarm holdings threaten the future viability of businesses solely 

engaged in farming. 

:At the request of the Senate Subcommittee on Antitrust, Monopoly 

and Business Rights, the Congressional Budget Office has prepared this staff 

working paper, Corporations In Farming. The paper identifies the different 

kinds of corporations in farming, the amount of farm land they control, their 

share of agricultural sales and farm program payments, and their nonfarm 

business activities. In keeping with CBO's mandate to provide objective and 

nonpartisan analysis of issues before the Congress, no recommendations are 

offered. 

The principal author of this paper is Peter M. Emerson. The paper was 

prepared in CBO's Natural Resources and Commerce Division under the 

iii 
direction of Assistant Director Raymond C. Scheppach. Francis Pierce and 

Patricia H. Johnston edited the manuscript. Angela Z. Evans and Deborah 

Vogt prepared it for publication. 

February 1980 

iv 

Alice M. Rivlin 

Director 
CONTENTS 

PREFACE. iii 

SUMMARY ix 

CHAPTER I. INTRODUCTION • 1 

CHAPTER II. OVERVIEW OF CORPORATE FARMING 4 

CHAPTER m. IMPORTANT CHARACTERISTICS OF CORPORATE 

AGRICULTURAL FIRMS • • • • • • • • • • • • • •• 8 

Primary and Business-Associated Firms 10 

Privately Held and Publicly Held Corporations 14 

Family, Independent, and Parent Corporations 15 

Largest Corporations . • • • • • • • • • • • • 18 

APPENDIX A. GOVERNMENT FARM PROGRAM PAYMENTS IN 

1974 ..••.....•.....••..•• ZZ 

APPENDIX B. NONF ARM BUSINESS ACTIVITY OF CORPORATIONS 

IN FARMING ••••••••••••••••• 2.6 

v 
TABLES 

TABLE 1. FARMrnG ACTIVTTIES OF CORPORATIONS AND OF 

ALL FARMS BY TYPE OF AGRICULTURAL PRODUCTION, 1974 .•• . . . . . .. •.•..... 6 

TABLE 2. SELECTED 

1974 ••• 

CHARACTERISTICS OF FARM F1RMS, 

TABLE 3. SELECTED CHARACTERISTICS OF PRIMARY AND 

11 

BusrnESS ASSOCIATED F1RMS, 1974 • • • • • • • 12 

TABLE 4. SELECTED CHARACTERISTICS OF CORPORATIONS 

BY TYPE OF OWNERSHIP, 1974 • • • • • • • • • •• 16 

TABLE 5. SELECTED CHARACTERISTICS OF CORPORATIONS IN 

FARMrnG WITH TOTAL CORPORATE RECEIPTS OF $5 

MILLION AND OVER, 1974 •• • • • • • • • • • •• 19 

APPENDIX TABLES 

TABLE A-I. U.S. DEPARTMENT OF AGRICULTURE PAYMENTS 

TO FARMERS BY MAJOR PROGRAMS, 1974 •••• 24 

TABLE B-1. SELECTED CHARACTERISTICS OF CORPORATIONS 

rn FARMING WITH TOTAL CORPORATE RECEIPTS 

OF $5 MILLION AND OVER, 1974 ••••••••• 27 

FIGURE 

FIGURE 1. CLASSIFICATION OF CORPORATE AGRICULTURAL 

FIRMS, 1974 CENSUS. • • • • • • • • • • • • 9 

vii 
SUMMARY 

The number of corporations involved in farming is on the increase. In 

1969, about 21,500 farms were operated as incorporated businesses. By 

1974, the number had increased to 28,400. Yet this does not mean that a 

few huge conglomerates and nonfarm interests are rapidly taking over 

farming. 

In 1974, corporations accounted for only about 2 percent of all farms. 

In other respects, they were somewhat more significant. For example, they 

owned 11 percent of all the land devoted to farming, sold 18 percent of 

agricultural products by value, and received 9 percent of all government 

farm program payments. 

As a group, corporations tend to operate larger-than-average farms, 

but the vast majority are family-owned businesses solely involved in the 

production and sale of agricultural products. Therefore, it is highly unlikely 

that these corporations are using nonfarm income and assets to enhance 

their position in farming. In the years ahead, a growing number of 

traditional farming operations will probably incorporate because of 

opportunities to reduce their income tax payments and for better estate 

planning. 

ix 
Corporations are found in every type of farming, and in every part of 

the country. In 1974, their share of total receipts was as high as 60 percent 

in nursery and greenhouse products, 37 percent in vegetables, and 33 percent 

in both cattle and calves and "other field crops!! (which includes sugarcane, 

sugar beets, and potatoes). On the other hand, corporate farms accounted 

for only 5 percent of total receipts in both hog and pig production and grain 

farming, and only 3 percent in tobacco. 

About 10 percent of the corporations reported that they were mainly 

engaged in nonfarm business activities. This latter group had farming 

operations that were about twice as large as the average corporation in 

farming. 

A few corporations engaged in farming are publicly held. In 1974, 

publicly held corporations operated slightly less than 1,000 farms, but 

accounted for nearly 20 percent of corporate agricultural sales and 40 

percent of government farm program payments to corporations. Nevertheless, with only 4 percent of the country's total agricultural sales, publicly 

held corporations do not dominate farming. 

Three-fourths of the publicly held corporations are called parent 

firms, meaning that they own or control other corporations. They are 

unique because they generally operate more than one farm and have very 

x 
large farm businesses in addition to nonfarm earnings. Some parent firms 

may have a competitive advantage over businesses solely involved in 

farming, since they often strive to link farming directly with other 

activities in the food and fiber industry. Also, a few of these firms have 

received huge government payments. In 1974, 21 publicly held parent 

corporations received government payments--an average of $434,000 per 

firm. This is many times greater than the average government payment to 

all other corporations. 

xi 
CHAPTER I. INTRODUCTION 

Corporations are becoming increasingly important in American agriculture. Although corporations are readily accepted in other fields, many 

Americans are very concerned about their activities in farming. In 

particular, there is a persistent fear that large corporations, through their 

stockholders and boards of directors, will place control of food and fiber 

production in the hands of financial interests that have little to do with 

farming. This, it is argued, could cause traditional family-owned and -

operated farms to become an endangered species, rural communities to 

suffer from rapidly declining farm employment, and consumers to pay 

excessively high prices for food and fiber products. From time to time, this 

fear is augmented by reports of new, large-scale farming operations 

financed by major corporations or of investment proposals that would allow 

urban financial institutions to enter the farmland market. 

Several states have reacted to these fears by enacting statutes 

restricting or regulating the ownership and operation of farms by corporations. And the Congress has considered proposals that would prohibit 

certain corporations with nonfarm assets from receiving government farm 

program payments and from owning or leasing farmland. 

1 
To aid the Congress in Wlderstanding the growing and increasingly 

complex role of corporations in American agriculture, this paper' examines 

data from the 1969 and 1974 Censuses of Agriculture. The 1969 Census 

provided the first national data on corporate farming, allowing a comparison 

of the number of farms, acreage, and agricultural sales of corporate and 

noncorporate farms. Unfortunately, the 1969 Census gave almost no 

information on the many different types of corporate firms and the 

substantial variations among them. }j 

The 1974 Census was far more detailed than its predecessor in its 

description of corporate farming. Although several years old, that census 

provides the most comprehensive description of corporate farming currently 

available. Nevertheless, definitive statements about the long-term growth 

of different types of corporations cannot be made Wltil the Bureau of the 

Census publishes the results of future surveys. 

In view of these limitations, this paper focuses chiefly on corporate 

farming in 1974, emphasizing the ownership and control of farmland by 

corporations, their scale of operations, their reliance on government 

1/ Corporations were separated into two categories: those having 10 or 

fewer shareholders, and those with more than 10 shareholders. 

2 
payments, and their nonfarm business activities. These data show that 

publicly held corporations-which are often huge corporations from outside 

agriculture-accounted for only about 4 percent of total agricultural sales in 

1974. 

3 
CHAPTER n. OVERVIEW OF CORPORATE FARMING 

Of the about 1,670,000 farms in the United States in 1974, 1.7 percent, 

or Z8,400 were incorporated businesses. The number of corporate farms had 

increased by one-third between 1969 and 1974, while the total number of 

farms continued to decline.}j During this period, corporations increased 

their share of total farmland from about 9 percent to 11 percent, and their 

share of farm sales from 14 percent to 18 percent. 

Most of the growth in the number of corporate farms occurred, 

however, among relatively small corporations-those with ten or fewer 

shareholders. These make up the vast majority of corporate farms-over 90 

percent in both 1969 and 1974. As the capital requirements and income 

earning potential of successful farms continue to mount, it seems likely that 

more and more family-owned and operated farms will incorporate. Such 

farms incorporate for several reasons: to obtain limited liability for 

business debts, to achieve greater flexibility in estate planning, to gain 

income tax savings, and to help insure continued business operations over 

time. 

Y A farm is defined as any place with agricultural product sales of 

$Z,500 or more. 

4 
The desire to reduce or defer taxes appears to be among the most 

prominent incentives causing some traditional farming operations to 

incorporate. By incorporating, many family farms can reduce their income 

tax payments, preserve more funds for reinvestment, and plan for a smooth 

transition of assets from one generation to the next. Another incentive for 

a one-person farming operation to incorporate is that health and accident 

insurance premiums may be paid as tax-free benefits by the corporation. 

Farming Activities 

Corporate farms are generally larger than average. In 1974, they had 

five to six times more acres and eight to ten times more agricultural sales 

than unincorporated farms. Many large farms, however, are not incorporated. For example, among farms selling $100,000 or more of agricultural 

products, only 11 percent were corporate farms. 

Corporations are involved in all types of agricultural production, but 

they playa slightly more important role in the livestock sector than in crop 

farming (see Table 1). They are particularly prominent in nursery and 

greenhouse products; vegetables; cattle and calves; other field crops 

(primarily sugarcane, sugarbeets, and potatoes); fruits, nuts, and berries; 

poultry and poultry products; and other livestock (primarily horses, fur 

bearing animals, and fish). In each of these sectors, corporate farms 

accounted for more than 2.5 percent of agricultural sales in 1974. 

5 
aTABLE 1. FARMING ACTIVTTIES OF CORPORATIONS AND OF ALL FARMS, BY TYPE OF AGRICULTURAL PRODUCTION, 1974 

Agricultural Product 

All Agricultural Products Sold 

Crops, Including Nursery and Greenhouse Products 

Nursery and Greenhouse Products 

Vegetables, Sweet Corn, and Melons 

Other Field Crops 

Fruits, Nuts, and Berries 

Cotton and Cottonseed 

Field Seeds, Hay, and Forage 

Grain 

Tobacco 

Total Crops 

Livestock, Poultry, and their Products 

Cattle and Calves 

Poultry and Poultry Products 

Other Livestock and their Products 

Sheep, Lambs, and Wool 

Dairy Products 

Hogs and Pigs 

Total Livestock, etc. 

SOURCE: U.S. Department of Commerce, 

Reports (November 1978), p.5. 

Corporate Farms 

Share 

of Total Receipts 

from Farming 

Percent Rank 

18.2 

60.3 1 

36.9 2 

32.6 4 

31.5 5 

15.8 9 

10.2 10 

4.9 13 

3.3 14 

14.2 

32.8 3 

28.1 6 

27.2 7 

23.1 8 

6.3 11 

5.0 12 

22.4 

Distribution of 

Receipts 

from Farming 

Percent Rank 

100.0 

7.0 5 

5.9 7 

8.7 3 

6.3 6 

2.4 9 

1.4 11 

8.2 4 

0.4 13 

40.3 

40.9 1 

11.9 2 

0.7 12 

0.7 12 

3.5 8 

1.9 10 

59.7 

Corporations in Agricultural Production, Vol. 

All Farms 

Share of 

Total Receipts 

from Farming 

Percent 

100.0 

2.1 

2.9 

4.9 

3.6 

2.8 

2.5 

30.5 

2.1 

51.4 

22.7 

7.7 

0.5 

0.6 

10.4 

6.7 

48.6 

4, Special 
The single most significant source of corporate receipts from farming 

comes from cattle and calves, owing to the large revenues associ.ated with 

this sector. In 1974, 41 percent of corporate receipts from farming were 

derived from the sale of cattle and calves. Furthermore, most of these 

sales were concentrated among relatively few corporations: 635 cattle 

feeders accounted for 37 percent of corporate agricultural sales. Compared 

to most farm businesses, they are huge enterprises each operating cattle 

feedlots with a capacity of 2,000 head or more and reporting, on average, 

annual agricultural sales of $8.6 million. 

Government Payments 

On the whole, government payments per dollars worth of agricultural 

sales for corporations are only about one-half as large as for sole proprietors 

and partnerships. ,!!! Nevertheless, there are substantial concentrations of 

government payments to particular types of corporations, as detailed in the 

following chapter. 

Y There is, however, uncertainty concerning the reliability of information on government farm program payments in the Census of Agriculture. The Bureau of the Census asked all farm operators to report 

total payments received for participating in government farm 

programs. The specific inquiry that appears on the census form is 

given in Appendix A. Farmers reported receiving $266 JIlillion in 

government payments in 1974. On the other hand, U.S. Department of 

Agriculture records show that government payments to farmers were 

$525.2 million in 1974, or approximately two times the total reported 

to the Census Bureau by farmers. USDA data cannot be disaggregated 

by type of business and, therefore, it is impossible to determine 

whether corporations are more or less likely to understate government 

payments than are other farmers. (Further discussion of this discrepancy is given in Appendix A.) 

7 
CHAPTER ill. IMPORTANT CHARACTERISTICS OF CORPORATE 

AGRICULTURAL FIRMS 

In order to distinguish among corporations involved in farming-large, 

agribusiness firms versus incorporated family-size farms, for example-it is 

helpful to divide farm corporations into two major categories, depending on 

the percentage of total receipts from the sale of agricultural products: 

a Primary firms, or corporations that receive 50 percent or more of 

their total receipts from the sale of agricultural products. 

a Business-associated firms, or corporations that receive less than 50 

percent of their total receipts from the sale of agricultural 

products. 1..1 

It is also helpful to further differentiate farm corporations by type of 

ownership and kind of corporate control (see Figure 1): 

a Type of ownership: 

Privately held corporations in which all or almost all of the 

stock is owned by the few persons who formed the business 

firm or by their successors. 

Y Data for nonfarm business activities were requested only if a firm's 

total receipts from all nonfarm activities were $50,000 or more. 

8 
, . 

Figure 1. 

Classification of Corporate Agricultural Firms, 1974 Census 

~ Family Corporations 

\ 

Privately Held Independent Corporations Corporations 

Parent Corporations 

Primary Firms 

~ Publicly Held Independent Corporations 

Corporations and 

Others Parent Corporations 

Farm 

Corporations 

~ Family Corporations 

SOURCE: 

\ 

Privately Held Independent Corporations Corporations 

Business-auociated 

Parent Corporations 

firms 

~ Publicly Held Independent Corporations Corporations and 

Others Parent Corporations 

U.S. Department of Commerce, Corporations in Agricultural Production, Vol. 4, Special Re~rts 

(November 1978). pp. 2·3. 

Publicly held corporations whose stock is bought and sold on 

recognized stock exchanges or over-the-counter markets. In 

addition, this category includes a small number of farms 

operated by religious orders or by incorporated charitable or 

nonprofit organizations. 

o Kind of corporate control: 

Family corporations,in which 51 percent or more of the 

stock is owned by persons related by blood or marriage. 

Independent corporations, which are not family corporations 

and which do not own or control other corporations, nor are 

owned or controlled by other corporations. 

Parent corporations,which own or control one or more 

subsidiary corporations. 

9 
Corporate farms, as a group, accounted for about Z percent of all 

farms and 18 percent of agricultural products sold in 1974 (see l'able Z). 

Family-owned corporations sold about one-half of these agricultural 

products. The remainder of this chapter discusses the substantial differences in acreage, sales, and government payments received by different 

types of corporations. Because corporations are responsible for only a small 

fraction of all of the country's farms, distinctions among types of corporations are most sharply drawn by focusing on the share of acreage and sales 

within the corporate segment of farming. However, the reader should bear 

in mind the relatively small size of the corporate segment. 

PRIMAR Y AND BUSINESS-ASSQClA TED FIRMS 

Relative to primary firms, business-associated firms tend to be large 

in acreage, sales, and government payments received (see Table 3). 

Although some primary firms have very large farm businesses, most are 

highly dependent on agricultural sales; these firms are similar to traditional 

family-owned and operated farms. Business-associated firms, on the other 

hand, are more likely to be large corporations using their nonfarm income 

and assets to enhance their position in farming. 

10 
:' 

"\, \~. 

Y', 

I 

I 

-,I 

i 

1 

! 

... 

... 

TABLE Z. SELECTED CHARACTERISTICS OF FARM FIRMS, 1974: IN PERCENT 

Categoriea Of Corporate Firms 

Primary Firms Bwdnesa-Aasociated Firms 

Characterilltic All All Privately-Held Corporations 

Unincorporated Corporate 

Publicly-Held Corporations Privately-Held Corporations Publicly-Held COrporatiDllll 

Firms y Firma Family Independent Parent Independent Parent Family Independent Parent Independent Parent 

Corporations Corporations Corporations Corporations Corporations Corporations Corporations Corporations_C~,_ations Corporationa 

Share of Farme 98.3 1.7 I.!O O.!S O.O! !I 0.01 0.09 0.04 0.03 

Share of Land 

Farmay 89.4 10.6 7.50 1.00 0.47 0.01 0.06 0.31 0.1! 0.58 

Share of Value of 

Agricultural Products Sold y 81.8 18.! 8.74 3.8! 1.00 0.17 0.81 0.37 0.Z6 0.60 

Share of Govemm .... t 

Farm Program Paym .... ts 11 91.! 8.8 3.78 0.50 0.75 0.01 0.58 0.11 0.11 0.11 

SOURCE: U.S. Departm .... t of Commerce, Corporations In Agricultural Production, VoL 4, Special Reports (November 1978), pp. 5-40; special tabulations prepared by the 

Bureau of tbe Cenaus, August 1979. 

y Sole proprietors, partnerships, aDd other uniDcorporated farms with agricultural product sales of $Z,500 or more. 

y Includes all l;md used far crops, pasture, gralling, woods, and other farming activities. It ill an operating Wlit concept and includes both land owned and operated and 

land r .... ted from othen. 

Y Includes the grosa market value of all crops, livestoclt, poultry, forestry products, and other agricultural products sold. It does not include income from agricultural 

service., government farm programs, recreation, or nonfarm sources. 

Y Payments received for participating in government farm programs. Does not include Commodity Credit Corporation loana. 

!I Lesa than 0.01 percent. 

0.01 0.04 

0.04 0.53 

0.14 !.!8 

0.05 !.M 
TABLE 3. SELECTED CHARACTERISTICS OF PRIMARY AND BUSINESSASSOCIATED FIRMS, 1974 

Characteristic 

Number of Firms 

Number of Farms 

Number of Firms in Farming Only 

Acres per Firm 

Value of Agricultural Products 

Sold per Firm (dollars) 

Government Farm Program 

Payments per Firm Receiving 

Payments (dollars) £../ 

Primary 

Firms ~/ 

24,149 

24,982 

22,709 

3,388 

485,171 

5,430 

BusinessAssociated All 

Firms y Corporations 

2,724 26,873 

3,460 28,442 

22,709 

5,251 3,577 

1,076,388 545,100 

48,920 8,032 

SOURCES: U.S. Department of Commerce, Corporations In Agricultural 

Production, Vol. 4, Special Reports (November 1978), pp. 

25-40; special tabulations prepared by the Bureau of the 

Census, August 1979. 

2:! Corporations drawing 50 percent or more of their total receipts from 

the sale of agricultural products. 

,!?/ Corporations drawing less than 50 percent of their total receipts from 

the sale of agricultural products. 

£../ Government payments were made to 2,750 primary firms and 175 

business-associated firms. 
The vast majority of corporate farms are operated by primary firms, 

although they represent only 1.5 percent of all the country's farms, incorporated as well as unincorporated. Primary firms accounted for most of 

corporate agricultural sales--about 80 percent. Most primary firms 

operated only one farm and restricted their business activities to farming. 

Business-associated firms, on the other hand, appear much more likely 

to operate more than one farm. While many of them engage in businesses 

related to farming, such as processing farm products or supplying farm 

equipment, almost half of them engage in activities outside the food and 

fiber industry. Business-associated firms, which average 5,300 acres and 

$1.1 million of agricultural products sold, are large: roughly twice as large 

in acreage and sales as primary firms. The largest business-associated 

firms, in terms of acreage, are those with business activities outside the 

food and fiber industry: these average 7,600 acres. The largest businessassociated firms, in terms of farm sales, are those involved in processing 

farm products, with $2..8 million of agricultural product sales per firm. 

Although the majority of government payments to corporations went 

to primary firms, some business-associated firms received large government 

payments: 175 business-associated firms averaged $49,000 in government 

13 
payments, approximately nine times as great as the average government 

payment to primary firms. 

PRlVA TE HELD AND PUBUCL Y HELD CORPORATIONS 

Among publicly held corporations in agriculture are a few huge 

conglomerates. Some people believe that these are in the process of taking 

over farming. Although there are relatively few publicly held corporations 

in agriculture, they tend to be much larger than other farm corporations and 

a few received very substantial government payments in 1974. 

Publicly held corporations appear most likely to be involved in farming 

for specific reasons, such as the following: to provide a guaranteed market 

for their sale of farm inputs, to provide highly technical management and 

equipment and very large amounts of capital, and to obtain a stable supply 

of raw products for processing and marketing. 

The fear that nonfarm interests are taking over agriculture is 

undoubtedly enhanced by the fact that a few publicly held corporations 

operate large farm businesses which are often directly linked to other 

activities in the food and fiber industry. Such corporations are perceived to 

14 
have a degree of market power and control that may give them a 

competitive advantage over other farm businesses and allow them to exploit 

consumers. 

In 1974, almost all of the corporations in farming were privately held. 

There were only 358 publicly held corporations, most of which were huge, 

with average sales about 17 times larger than those of privately held 

corporations (see Table 4). The publicly held corporations also own, on 

average, almost five times as much acreage as privately held corporations. 

Nevertheless, for the country as a whole, publicly held corporations account 

for only 4 percent of total agricultural sales. 

Only about one agricultural corporation in nine received government 

payments, but of those that did, publicly held corporations received a huge 

share. Forty percent of all government payments went to 28 of these large 

corporations, which received an average of $331,000 each. The remaining 

60 percent of government payments went to about 3,000 privately held 

corporations, which received an average of $4,900 each. 

FAMILY, INDEPENDENT, AND PARENT CORPORATIONS 

Family corporations and most independent corporations are .generally 

similar to the privately held, primary firms discussed in the preceeding 

15 
TABLE 4. SELECTED CHARACTERISTICS OF CORPORATIONS BY TYPE OF OWNERSHIP, 1974 

Value of 

Agricultural 

Land in Products Firms Government 

Farms Sold Receiving Payments 

Firms Farms (acres (dollars Payments (dollars per firm 

(number) (number) per firm) per firm) (number) receiving payments) 

Privately Held: ~/ 

Family'EJ Zl,Z75 Zl,758 3,3Z4 345,085 Z,57Z 4,OZl 

Independent E./ 4,711 4,9Z9 2,154 697,410 Z7Z 6,004 

Parent ~ 5Z9 808 18,OZO Z,436,864 53 4Z,755 

Total Z6,515 Z7,495 3,409 449,417 Z,897 4,915 

Publicly Held and Other: 

Independent E:.f 9Z 186 4,659 7 ZO,714 

Parent 'if 266 761 19,96Z Zl 433,76Z 

Total 358 947 16,029 7,631,793 Z8 330,500 

All Corporations Z6,873 Z8,44Z 3,577 545,100 Z,9Z5 8,032 

SOURCE: U.S. Department of Commerce, Corporations in Agricultural Production, Vol. 4, Special 

Reports (November 1978), p. 22. 

!f A corporation in which all or almost all of the stock is owned by the few persons who formed 

the business firm or by their successors. 

EJ A corporation in which 51 percent or more of the stock is owned by persons related by blood or 

marriage. 

El A corporation that is not a family corporation and that does not own or control another 

corporaton, nor is owned or controlled by another corporation. 

~f A corporation that owns or controls one or more subsidiary corporations. 

:=..f A corporation whose stock is bought and sold on recognized stock exchanges or over-thecounter markets. 

16 
section in terms of their acres, farm sales, and government payments per 

firm. Parent corporations, by contrast, tend to be much larger in all three 

of these respects, as detailed below. 

Family Corporations. Eighty percent of the corporations in farming 

are family-owned businesses. They tend to be chiefly concerned with 

farming and most operate only one farm. Slightly more than 21,000 familyowned corporations accounted for about three-fourths of the acreage and 

one-half of the agricultural sales of all farming corporations. 

Independent Corporations. Any corporation that is not in control of, 

or subsidiary to, any other corporation, and is not family-owned, is called an 

independent corporation. Most independent corporations were privately 

held. On average, these corporations were about equal to family corporations in acreage, agricultural sales, and government payments per firm. An 

exception were a small number of publicly held, independent corporations 

that tended to be considerably larger. 

Parent Corporations. Many of the huge agricultural corporations are 

found among about 800 parent corporations (corporations that control one or 

more subsidiary corporations) that reported farming operations. Most of 

17 
these parent corporations had substantial nonfarm business activities. However, as a group, parent corporations accounted for only one-half of the 

total volume of farm sales of family corporations. 

The largest parent corporations are generally publicly held. One-third 

of all parent corporations are of this type, and these are generally huge, 

with average farming operations of 20,000 acres and $9.3 million of 

agricultural sales. Twenty-one of them reported government payments in 

1974, implying an average payment of $434,000 per firm. 

LARGEST CORPORATIONS 

The vast majority of farming corporations are modern family farms. 

But there are a few huge corporations: In 1974, about 7 percent of all 

farming corporations had total corporate receipts of $5 million or more. 

These largest corporations accounted for 51 percent of agricultural products 

sold by corporations and they averaged more than 15,000 acres and $7.4 

millon in annual farm sales (see Table 5). Eighty-five of the largest 

corporations received about 50 percent of government farm program 

payments, or an average of $137,000 per firm. 

About one-fourth of the largest corporations reported farming to be 

their only business activity. In terms of acreage and farm sales, the large 

18 
TABLE 5. SELECTED CHARACTERISTICS OF CORPORATIONS IN 

FARMING WITH TOTAL CORPORATE RECEIPTS OF $5 

MTI...LlON AND OVER, 1974 

Number of Firms 

Number of Farms 

Acres per Firm 

Value of Agricultural Products Sold per Firm (dollars) 

Government Farm Program Payments per Firm Receiving 

Payments (dollars) 

Principal Business Activity 

Primarily farming 

Related to agriculture but outside farming 

Other business outside the food and fiber industry 

998 

1,9l3 

15,152 

7,403,325 

136,976 ~I 

354 firms bl 

301 firms -

343 firms 

SOURCES: U.S. Department of Commerce, Corporations In Agricultural 

Production, Vol. 4, Special Reports (November 1978), p.67; 

special tabulations prepared by the Bureau of the Census, 

August 1979. 

~ Government payments were made to 85 firms with total corporate 

receipts of $5 million and over. 

'!!.! 264 firms were involved in farming only. 

19 
corporations that engaged exclusively in farming were similar to the large 

corporations that also engaged in other businesses. These large' farmingonly corporations received far less government payments than did corporations with other business activities: the large farming-only corporations 

that received payments averaged around $22,000 per firm, less than onefifth of the amount reported above for large corporations as a group. 

The largest corporations with principal business activity related to 

agriculture but outside farming were involved in activities such as supplying 

farm inputs, processing and wholesaling farm products, and providing 

agricultural services. Many of these corporations aim to achieve greater 

efficiency and control by directly linking farm production with other 

activities such as processing and marketing. In carrying out this strategy, 

some large corporations are perceived as a direct threat to more traditional, 

independent farmers and to consumers. 

Finally, the largest corporations with principal business activity outside the food and fiber industry were unique in that they reported more than 

twice as much acreage as the largest farming-only corporations. In total, 

these land holdings were not very significant: accounting for 0.7 percent of 

all U.S. farmland. But these holdings may be concentrated in a few regions, 

thereby enhancing the concern that nonfarm interests are taking over 

farming. 

20 
APPENDIXES 
APPENDIX A. GOVERNMENT FARM PROGRAM PAYMENTS IN 1974 

This appendix explains the procedures used by the Bureau of the 

Census to obtain data on government farm program payments. It also 

provides information obtained from the U.S. Department of Agriculture on 

the farm programs under which payments were made in 1974. 

According to the Census of Agriculture, farmers reported $265.9 

million in government farm program payments in 1974. However, this is 

only about one-half of the $525.2 million paid to farmers by the U.S. 

Department of Agriculture in that year. Reasons for this huge difference 

are not known. One possibility is that farmers did not understand that 

they were expected to report disaster payments. 

Government farm program payments found in the Census of Agriculture were obtained from Form 74-A1, Section 36, by asking the respondent to report: "Payments you received for participation in Government 

farm programs (Do not include redeemable loans) •••• " 

The Farm Census Guide, which provides detailed instructions for 

completing the census forms, contains the following statement relating to 

government payments: 

22 
Report all government payments received by the farm operator 

from any of the following programs: 

Appalachian Land Stabilization and Conservation Programs 

Beekeeper Indemnity Payment Program 

Cotton Insect Eradication Program 

Cropland Adjustment Program 

Cropland Conversion Program 

Disaster Payments Program 

Extra Long Staple Cotton Program 

Great Plains Conservation Program 

Milk Indemnity Payment Program 

Rural Environmental Conservation Program (including Emergency Conservation Measures) 

Sugar Incentive Program 

Water Bank Program 

Wheat, Feed Grains, and Upland Cotton Target Price Program 

-The total amount of these payments may have been furnished to 

the operator in a Report of Payment to Producer (sent by the 

Agricultural Stabilization and Conservation Service). If so, this 

figure may be copied on the census report form. 

U.S. Department of Agriculture (USDA) payments to farmers in 1974 

are presented by major programs in Table A-I. Disaster payments to feed 

grain, wheat, and cotton farmers accounted for nearly 40 percent of all 

USDA payments. Most of the remaining payments were dispersed under 

environmental and conservation programs, the Sugar Act Program, and the 

Cropland Adjustment Program. Because of relatively favorable market 

prices, farmers received no deficiency payments in 1974. In fact, USDA 

payments to farmers were less than $1 billion per year from 1974 through 

1976. Compared to USDA farm program payments of $4.0 billion in 1972, 

$2.6 billion in 1973, $1.8 billion in 1977, and $3.0 billion in 1978, it is evident 

23 
TABLE A-I: U.S. DEPARTMENT OF AGRlCULTURE PAYMENTS TO FARMERS 

BY MAJOR PROGRAMS, 1974: IN MILLIONS OF DOLLARS 

Program 

Feed Grain, Wheat, and Cotton Disaster 

Payments Program 

Rural Environmental Conservation/ 

Assistance Programs 

Sugar Act Program 

Cropland Adjustment Program 

Emergency Conservation Program 

Extra Long Staple Cotton Program 

Beekeepers Indemnity Program 

Others 

Total 

Payments 

$209.0 

169.5 

81.5 

41.0 

14.0 

5.0 

3.3 

1.9 

$525.2 

SOURCE: Agricultural Stabilization and Conservation Service, U.S. 

Department of Agriculture, October 1979. 

that the 1974 census year was characterized by low government payments to 

farmers. 

The discrepancy between actual USDA payments to farmers and total 

government payments reported to the Census Bureau by farmers in 1974 

may be caused by several factors. Some respondents may not have 

24 
understood that they were expected to report all government paymentsincluding disaster payments--to the Census Bureau. It is possible that some 

farmers who received USDA payments failed to complete a Census report or 

otherwise decided to understate their government payments. And some 

farmers may have thought that all, or a portion, of the USDA payments 

dispersed in 1974 were for either 1973 01' 1975 programs. 

Z5 
APPENDIX B. NONFARM BUSINESS ACTIVITY OF CORPORATIONS 

IN FARMING 

Some corporations engaged in farming have extensive interests in 

other spheres. In the 1974 Census, nonfarm business activities of corporaHons in farming were divided into the following categories: supplying farm 

inputs, processing farm products, wholesaling or retailing farm products, 

performing agricultural services or other activities related to agriculture, 

and carrying on business outside the food and fiber industry. 

Fifteen percent of all corporations in farming, or about 4,ZOO firms, 

reported nonfarm business activities. Among all corporations in farming, 

these firms accounted for one-fourth of the acreage, slightly more than onethird of agricultural sales, and one-half of government payments. 

Disaggregated by principal business activity (that is, the business 

activity accounting for the largest proportion of total corporate receipts), 

these firms were about equally divided between farming, business related to 

agriculture but outside farming, and other business outside the food and 

fiber industry (see Appendix Table B-1). 

The 1,440 firms that reported farming as their principal business 

activity were about two times larger in acres per firm and four times larger 

Z6 
TABLE B-I. SELECTED CHARACTERISTICS OF CORPORATIONS IN FARMING WITH NONFARM 

BUSINESS ACTIVITIES, 1974 

Number of Firms 

Number of Farms 

Acres per Firm 

Value of Agricultural Products 

Sold per Firm (dollars) 

Government Farm Program 

Payments per Firm Receiving 

Payments (dollars) E./ 

Principal Business Activity ~/ 

Other 

Related to Business 

Agriculture Outside the 

but Outside Food and Fiber 

Farming Farming 'EJ Industry 

1,440 1,501 1,223 

1,737 1,913 1,547 

5,837 3,327 7,613 

1,607,773 1,206,570 916,612 

25,493 37,645 62,620 

All 

Corporations 

with Nonfarm 

Business 

Activities 

4,164 

5,197 

5,451 

1,260,152 

37,300 

SOURCES: U.S. Department of Commerce, Corporations In Agricultural Production, Vol. 4, Special 

Reports (November 1978), pp. 64-6; special tabulations prepared by the Bureau of the Census, 

August 1979. 

y Farming was designated as the principal business activity of those corporations that l\eceived 50 

percent or more of their total receipts from the sale of agricultural products. The principal 

business activity of all other firms was determined by the nonfarm business activity that accounted 

for the largest proportion of their nonfarm business activities. 

E/ Includes supplying farm inputs, processing farm products, wholesaling or retailing farm products, 

and performing agricultural services. 

£.I Government payments were made to 341 firms with nonfarm business activities. 

27 
in agricultural sales per firm than all farming corporations with no nonfarm 

business activity. In 1974, 166 firms with nonfarm business that· reported 

farming as their principal business activity reported, on average, government payments of $25,000 per firm. This is six times greater than the 

average government payment to farming corporations with no nonfarm 

business activity. 

Firms whose principal business activity was related to agriculture but 

outside farming, as well as those whose principal business was outside the 

food and fiber industry, were larger in corporate receipts and smaller in 

agricultural sales than firms engaged principally in farming. Processors, 

wholesalers, and retailers of farm products-most of which are thought to be 

vertically integrated through direct ownership or contracting--dominate the 

group of firms having their principal business activity related to agriculture 

but outside farming. As a group, the 1,223 firms principally involved in 

other business outside the food and fiber industry controlled a relatively 

large amount of land in farms; but 50 percent of those firms had less than 

$50,000 in agricultural product sales. Seventy-nine firms principally 

involved in other business outside the food and fiber industry received 

$62,000, on average, in government farm program payments. This is more 

than double the average government payments of those firms with farming 

as their principal business activity. 

28