In 2005, the national Farm Credit System undertook a comprehensive research project to examine agriculture and rural America and analyze trends. The author tackles the implications for New England and suggests appropriate policy goals.Agriculture - New England

James Putnam

English

Research Papers in Economics

Fall  2006 20
New Horizons
Farm field, Grand Isle,Vermont.
Photographs for this article, including back cover, by Julie Weinstein.& Banking Communities 21
by James Putnam, II
First Pioneer Farm Credit
Dramatic changes in farm technology,
efficiency, marketing, and farm struc-
ture occurred throughout the 20th cen-
tury and continue at a rapid pace in the
New England farm sector. Fifty years
ago, a New England farmer’s chief com-
petitor was down the road or in a near-
by state. Today competition is often
global—and almost always with the dis-
tant U.S. farm regions of the West.
What agriculture should we sustain in
New England? Are we willing to stand
on the sidelines and let free market
forces take their course? Can farm
entrepreneurs be catalysts for develop-
ment of rural communities? With
Congress gearing up to rewrite the
Farm Bill in 2007, what are appropriate
policy goals for New England?  
Does New England
Agriculture Matter?
The fact is, less than one percent of
New Englanders farm (0.82 percent as
of 2002).1 Viewed another way, $1.98
billion of farm production in 2002
amounted to about 0.35 percent of
New England’s state gross domestic
product (GDP).2
The value of sustaining a healthy agri-
cultural economy in our region is clear-
ly not about population numbers or
primary economic impact. Agriculture
is more significant in terms of local eco-
nomic impact. For example, farmers
account for 4.5 percent of Vermont’s
population and the gross value of agri-
cultural production is a healthy 2.5 per-
cent of the state’s GDP.
There are at least four other reasons
why New England agriculture matters:
• Economic multiplier. Agriculture 
has a substantial economic 
multiplier. For New England, 
12.2 percent of our total 2002 
employment was farm and farm-
related.3 The U.S. Department of 
Agriculture defines this statistic to 
include farmers, those who 
produce and sell inputs to farmers, 
those who process and market 
products using raw materials from 
farms, and those in wholesale 
and retail trade of food and 
fiber products. 
• Land use. Agriculture plays a big 
role in New England land use. 
The  2002 Census of Agriculture 
indicates that 10 percent of our 
land is in farms. Any vision for 
New England’s future land use 
necessarily involves its farms.
• Quality of life. Agriculture affects 
New England’s uniqueness in 
terms of quality of life for both 
residents and tourists. Vermont’s 
dairy farms, the Connecticut 
Valley’s tobacco barns, Plymouth 
County’s cranberry bogs, and 
Downeast Maine’s wild blueberry 
fields help define our region. 
And thousands of roadside stands, 
in-city tailgate markets, pick-your-
own offerings, bed-and-breakfasts, 
and corn mazes strengthen 
New England’s tourism industry 
and provide memorable exper- 
iences for local consumers.
• Environment. The environmental 
boon of properly managed land in 
active farm production is rapidly 
emerging as a serious benefit of 
agriculture, and is looming even 
larger in public policy. Active and 
well-managed farmland supports 
diverse wildlife populations and is 
more benign to watershed 
hydrology than suburban 
subdivisions. Crops, pastures, and 
forests are critical links in our 
planet’s carbon-dioxide ecology. 
A Vision on the Horizon
In 2005, the national Farm Credit
System (FCS) undertook Horizons, a
comprehensive research and market-
assessment project that examines agri-
culture and rural America and analyzes
trends for the future.4 Three FCS enti-
ties serve New England: First Pioneer
Farm Credit, ACA (agricultural credit
association); Yankee Farm Credit; and
Farm Credit of Maine.
Although New England agriculture
differs from other U.S. farming regions
in average farm size and other ways, the
region is on the same fundamental tra-
jectory for nearly all major American
agricultural trends, just more advanced.
New England’s experience may well be
a leading indicator of agriculture’s direc-
tion. For example, New England has
been ahead of most other U.S. regions
in diversifying into both niche-farming
enterprises and agritourism.
Each of the eight Horizons conclu-
sions has meaning for the future of New
England agriculture.
rizons
for New England AgricultureFall  2006 22
Heterogeneity
American farmers are not a homoge-
nous group. There is tremendous 
diversity in farm size, annual revenue,
ownership structure, and marketing
approaches. To a lesser extent, there is
an emerging diversity in the age, eth-
nicity, and gender of owners and 
operators. An overwhelming majority
of small-scale U.S. farms dominate the
food and fiber production system. New
England agriculture is even more
diverse, and has substantially more
niche and direct marketing than major
American farming regions. Moreover,
new people are entering agriculture:
The 2002 Census found that 11 percent
of New England farmers began farming
within the previous four years.
Diversification
Relatively few farming-only business-
es remain. The majority of farmers,
especially small operators, rely on a
wide array of nonfarm jobs to stay in
agriculture. Even larger farmers diversi-
fy their income as a risk-management
strategy through agriculture-related or
nonfarm investments such as trucking,
landscaping, building maintenance,
and snowplowing. In New England, 76
percent of farmers earn more than half
their income off the farm. Only 11 per-
cent are 100 percent reliant on farming.
Evolution
Business models and farm-ownership
structures continue to evolve. Farmers
depend on a wide range of businesses
for products and services (such as crop-
input suppliers, livestock feed dealers,
veterinarians, lenders, and crop 
consultants). The businesses may or
may not be owned by farmers or be
located in a rural community, but all
are essential to the economic viability
and quality of life for farmers. In New
England, farmers are innovative entre-
preneurs, developing businesses that
include everything from on-farm 
bakeries to methane production.
Bright Future 
Although the number of farmers,
agriculture-related jobs and industries,
and agriculture-dependent communi-
ties has declined, the future of both
U.S. and New England agriculture
remains bright. The competitive 
pressures of globalization and techno-
logical advances have resulted in more
consolidated, efficient systems for pro-
ducing food and nonfood products.
Nevertheless, small and niche agricul-
tural enterprises have injected local
communities with new vitality.
Examples include farms with ice cream
stands and petting zoos, elaborate corn
mazes open to the public, and bed-
and-breakfast businesses on farms.
Agriculture will increasingly be a source
of energy production, feedstocks for
industry and medicine, and other
value-added products. 
Farming in the Shadow 
of the City 
Some rural areas retain few ties to
agriculture. Conversely, more agricul-
ture and related businesses are located
in suburban areas and near metropoli-
tan centers. It is becoming increasingly
difficult to define a rural community
solely by population density. Rural
communities continue to grow if they
are located near growing urban areas or
regional economic centers blessed with
scenic resources or designated as attrac-
tive retirement destinations. According
to the 1997 Census of Agriculture, 47
percent of New England farms were in
metro counties and were producing 53
percent of the region’s dollar value of
production on 34 percent of New
England’s farmland.5
Collaboration
Regional collaboration, public-
private partnerships, and coalitions of
investors are key to the future of many
rural communities. To create new jobs,
attract new business, and foster an
environment for future economic
development, agricultural America
Farm windmill on the shore of Lake Champlain, Grand Isle,Vermont.must find new ways to reinvest farm
real estate equity and to form partner-
ships among financial institutions,
government, universities, rural eco-
nomic development agencies, and local
farm and community leaders. Some
states are developing agricultural inno-
vation centers with the objective of
bringing together scattered public, 
private, and industry resources to sup-
port entrepreneurial agriculture. 
Entrepreneurship
Entrepreneurs remain the lifeblood
of American agriculture and rural com-
munities. Historically, the ingenuity of
American farmers and ranchers drove
U.S. agriculture’s productivity growth.
Today’s rural entrepreneurs, farmers,
and ranchers continue to need access to
capital, essential infrastructure, and
business support services. New
entrants to New England agriculture,
often with no prior farming back-
ground, are a healthy sign of continued
entrepreneurial vitality. Public policy
that supports entrepreneurial activity
and provides access to capital markets
will be critical.
Access to Capital
Ongoing access to debt and equity
capital is essential for the future pros-
perity of agriculture and rural commu-
nities in New England and across
America. Farms, rural businesses, and
communities need access to depend-
able, competitive financial products
and services to thrive in this rapidly
changing environment. Initiatives such
as First Pioneer Farm Credit’s
FarmStart will provide small working-
capital investments for start-up farms
in the company’s six-state service region.
As we celebrate the Farm Credit System’s
90th anniversary, we hope the Horizons
initiative will be embraced by all who
seek a bright role for agriculture in the
New England economy.
James Putnam, II, is senior vice 
president at First Pioneer Farm Credit,
ACA, www.FirstPioneer.com, in Enfield,
Connecticut. 
Endnotes
1 See Statistical Abstract of the United States:
2006; U.S. Census Bureau, 2002 Census of
Agriculture, and NASS-USDA; http://
www.nass.usda.gov/Census_of_Agriculture.
2 Gross State Product, U.S. Bureau of
Economic Analysis, http://www.bea.gov/bea/
newsrel/gspnewsrelease.htm.
3 State Fact Sheets, Economic Research Service-
USDA, http://www.ers.usda.gov/ StateFacts.
4 See  21st Century Rural America: New
Horizons for U.S. Agriculture, The Farm Credit
Council, Inc., 2006, www.fchorizons.com,. 
5 1997 Census of Agriculture, NASS-USDA,
http://www.nass.usda.gov/census/index1997.htm.
Metro/nonmetro view compiled by the author.
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New horizons: for New England agriculture

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New horizons: for New England agriculture

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